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Use a graphic to visually demonstrate the standard equilibrium model's application to the policy or situation in the article.

Analyze whether the model’s predictions align with the article's content.

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- Present a comparative analysis of the current situation with a past policy or scenario.
- Use real-world examples or expert viewpoints to provide a broader perspective.

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Identify and explain relevant economic concepts related to the article.

Describe how the article ties into class economic principles.

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Summarize the positive (descriptive) and normative (value-based) analysis of the policy or situation.

Present a reasoned conclusion on the policy's effectiveness, considering efficiency, equity, winners and losers, etc.

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- Discuss any market failures, unintended consequences, or information imperfections affecting the situation in the article.
- Explain how these factors challenge or modify the predictions of the standard equilibrium model.
- Discuss potential unintended consequences, externalities, market power, or reasons the standard market equilibrium model may not be applicable.

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Eating out costs an average of $16.28 per meal, compared to $4.23 for a home-cooked meal, largely due to inflation and shrinkflation.

Shrinkflation and food delivery apps, such as Uber Eats and DoorDash, increase costs further.

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Past Scenario (2008 Financial Crisis):

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Past Scenario (2008 Financial Crisis):

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Similar to today, the 2008 financial crisis saw rising food prices, forcing consumers to cut back on dining out and turn to home cooking as a cost-saving strategy.

The Emergency Food Assistance Program (TEFAP) is a federal program by the U.S. Department of Agriculture (USDA) that helps low-income individuals and families during tough economic times. During the 2008 financial crisis, TEFAP was vital in assisting communities with rising food prices by providing surplus food to food banks. The program aims to reduce food insecurity and ensure that people have access to nutritious food, especially during crises.

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This model's prediction aligns with both of the articles. Both of these articles overall argue that eating out at restaurants and buying fast food is worse for you (costs more money because of restaurant markups, food is not likely to be healthy and come out in large proportions, etc.). Because consumer preferences are changing towards eating at home more often, this will lead to a downward shift in demand. In turn, this will lead to a decrease in price and a decrease in quantity as shown on the graph.

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Experts today suggest strategies like bulk buying and meal prepping to manage rising food costs, similar to advice offered during the 2008 crisis. For instance, in New York, residents save nearly $19.40 per meal by cooking at home, showcasing the financial relief that home-cooked meals can provide. Both periods reflect a shift toward home cooking as a solution to economic pressures, highlighting the ongoing need for programs like TEFAP to combat food insecurity during financial hardships.

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The article discusses the pros and cons of cooking meals versus eating out which depends on what a consumer values; ie their time, their health, and budgeting

Although it appears that cooking at home is more economical, grocery stores have been indulging in shrinkflation which may slightly mark up products while reducing quantities

The article also gives tips to save at home and while eating out such as buying in bulk, looking for coupons, and avoiding using third party delivery services

The second article hones in on more specific pros and cons of eating out versus cooking. Cooking is a useful life skill and hobby, but also being a major time investment. On the other hand, when one eats out they get to have a specialized dining experience with unique atmospheres, but are eating lower quality food with little nutritional value

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Consumers don’t know what's in their food when they eat fast food due to poor transparency on nutrition labels

Consumers underestimate the cost to their health that this food will have on them

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Eating less doesnt always mean your eating better, If this doesnt motivate you i dont know what will! #healthyliving #gymjourney #calories #mcdonalds #thatgirl #healthyhabits #weightloss #cleaneating #caloriedeficit #startnow #healthyfood

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People become reliant on fast food and eating out because of the convenience, which leads to a cycle of unhealthy eating

This may lead to a rise in the price of healthcare if more people become dependent on it

Another market failure is overall health of food - creating negative externalities - such as obesity and diabetes

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Predictions of the Standard Equilibrium Model

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Predictions of the Standard Equilibrium Model

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Challenges the standard equilibrium model

The original model might assum that the average consumer only uses price to decide whether or not to cook at home

Consumer might have incomplete information and might prioritize convenience over the cost

Consumers might not have rational decision making habits and this will cause it to deviate from the standard equilibrium model

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Potential Unintended Consequences and Market Power

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Potential Unintended Consequences and Market Power

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Fast food chains as well as large brands hold a big portion of market power, and these companies dominate in marketing strategies

They may push out other competition and lead to less options and higher prices

If the population continues to rely on fast food, the costs of healthcare will rise

Americans health will get worse

Why the standard equilibrium model may not be applicable: not all communities have equal access to healthy cooking options,

Lower income people are disproportionately affected

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Healthy eaters tend to eat at home more often since their lifestyle prioritizes healthy and pure ingredients.

People who prioritize time often opt for fast food because it is more timely than cooking.

People who want to build the habit of cooking themselves will opt to eat at home.

People who prioritize convenience will opt for fast food since it is faster and easier on the go.

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1. Inflation

The article discusses 10% of  inflation is being driven by “shrinkflation”

Shrinkflation refers to phenomenon that quantity is decreasing but the price is increasing

Example of this was Oreos and Doritos have become 26.4% more expensive since Jan 2019, 9.8% of the price increase has gone hand in hand with giving consumers less quantity of chips/cookies.

Fast food chains have changed budget menus using similar idea of bumping up prices or decreasing quantity

Supply chain costs and labor are also factors to consider when thinking about why fast food prices are increasing

2. Cost benefit

Within the article they are using the cost benefit analysis which focuses on total costs and benefits within a decision

Cost benefit helps consumers make decisions

Weighing the different factors at play (time, money, health)

The trade off between saving money/time eating fast food vs spending more and having a healthier home cooked meal

3. Negative externality

Negative externality is when consumers (third party) is affected by economic activity

Subsidy/ government intervention may be put into place to correct the negative externality

Increased consumption of fast food due to saved money and time can lead to negative externalities

Increased littering

Worsen health conditions such as diabetes or heart problems

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Positive (descriptive analysis)

Cost comparisons: Both articles provide analytics on the long term costs of eating out versus cooking. For example, “The Cost of Eating Out Versus Eating In By State” states the average meal eating out at a relatively inexpensive restaurant would still be 285% more expensive than cooking at home

Nutritional considerations: The food consumers eat from restaurants, more specifically, fast food establishments is much higher in calories and fat than a home cooked meal

Time Considerations: Cooking at home requires many steps like food shopping, preparation, and cooking, so it ends up being way more time consuming than going out to eat a meal

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Normative (value based analysis)

Lifestyle considerations: For families with members who have allergies, are picky eaters, or care to live a healthier lifestyle, cooking at home makes way more sense as you know exactly what is going in to the food you are eating

Convenience: People who tend to be lazier and not wanting to put as much effort into meals tend to want to eat out more as it is more time efficient

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From both articles provided it is evident that cooking at home is the superior choice. Individuals who commit to this lifestyle benefit both economically and physically long term.

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Efficiency: Although eating out may seem more efficient in the short term, there are ways to grocery shop to make cooking at home more efficient. If consumers buy in bulk while grocery shopping, their prices will reduce significantly. Additionally, making an abundance of food will allow one to have leftovers and not have to prepare anything for the next few days.

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Equity: Individuals who do not have much money will benefit more from cooking at home. Being that it is more cost effective than going out to eat, they will save money in the long run. Additionally, if people who have less disposable income buy their meals in bulk, they will have enough leftovers to eat for a while, allowing them to budget.

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Winners: There are many people who win in this situation of cooking at home. First, people who are trying to budget their money will surely save more by not going out to eat. People who value their nutrition also benefit from this as restaurants typically add unnecessary ingredients that are harmful to one's health. When cooking at home, people can effectively portion control so they don’t eat more than desired.

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Losers: Many individuals have busy lives that don’t have time to grocery shop, meal prep, and cook. For people who place a heavier value on convenience than cost, it is way more efficient to eat out in order to save time.