Coffee Bean Market - Arabica by XueTing Lee https://padlet.com/lee_xueting/16A03GROUP1 en-us 2016-04-06 00:09:09 UTC 2023-02-19 13:24:44 UTC hello@padlet.com News Article 1 lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256053 2016-04-04 05:48:50 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256053 News Article lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256054 2016-04-04 05:51:11 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256054 With reference to the 2 news articles,  explain the fall in prices of coffee beans in Brazil. lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256055 2016-04-04 05:52:46 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256055 Group name: lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256056 Please write out the names of the members in the group.
1.Chin Jing Hng
2.Chong Wen Yee 
3.Hazirah
4.
5.]]> 2016-04-04 06:03:43 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256056 Topic: Demand, Supply & Market Equilibrium lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256057 Objective - Students will be able to identify and explain how the demand and supply factors affect the market for coffee beans.]]> 2016-04-04 06:04:45 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256057 Welcome:) lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256058 Dear Students,

Welcome to Home-Based Learning 2016!

By now, you should have the list of the team members in your group. Each team will analyse 2 articles below to identify 3 evidence/information (2 Demand + 1 Supply or 2 Supply + 1 Demand factors)  to answer the following essay question:

a) With reference to the 2 news articles, explain the fall in prices of coffee beans in Brazil.

To discuss the answers with your group members, double click anywhere on the wall and a virtual "sticky note" will appear at the top. From, enter your name, then you can use the "sticky note" to "chat" with each other. 

For example, Miss Lee: I don't think that is a non-price factor that affects demand. Please remember to write your name before the statement :) 

Lastly, please identify these non-price determinants of demand & supply by quoting the relevant phrases from the article. 

For example, as stated in article 1, "the recession in Europe has hit demand". After quoting the evidence for the article please proceed to explain how this non-price factor affects demand or supply with economic rigour. 

I have provided some scaffolding statements to guide you in your essay development. Address each statement by writing the essay segment in the respective sticky note. Press the pencil button to write the respective essay segment.

]]> 2016-04-04 06:06:48 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256058 Introduction lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256059 Explain market mechanism:
The market for coffee beans in Brazil is determined by the market forces of demand and supply.

Define demand:
Demand for coffee beans  is defined by the amount of coffee beans that consumers are willing and able to pay at various prices at a fixed time.

Define supply:
Supply on the other hand, is defined by the amount of coffee beans that coffee bean growers are willing and able to supply at various prices at a fixed time.


Wen Yee]]> 2016-04-04 06:30:11 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256059 Body: State the initial equilibrium lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256060
The initial market equilibrium of coffee in Brazil is at E1, which is the intersection of D1 and S1. At E1, the market price for coffee is P1 and the market quantity for coffee is at Q1.]]> 2016-04-04 06:31:44 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256060 Body: Identify and explain whether the factor/event shifts the demand or supply curve. (2 Demand + 1 Supply or 2 Supply + 1 Demand) lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256061
The increase in demand for coffee beans by countries like Brazil, China, Indonesia could have caused the prices of coffee beans to decline. This is evident from news article 1, which says 'in places like China, Indonesia and Brazil itself, where coffee is an affordable luxury for the middle class, the market is growing by around 5 percent a year'. Due to reasons like economic growth, the income of consumers are steadily rising. This inevitably causes the purchasing powers of consumers of coffee to increase as they are now more able to by coffee. Assuming that coffee is a normal good, the rise in income of consumers of coffee will cause the demand of coffee to increase as well. As such, the demand curve (D1) will shift righwards to D2, cetris paribus. (Jing Hng)
 
Another demand factor which leads to the increase in demand for coffee beans in the market could be due to the leaf rust occuring in Arabica coffee beans. This is seen from article 2, where 'the Central American countries where the finest coffee is grown, including Guatemala, Nicaragua and El Salvador, have been hit by leaf rust, which could wipe out 30% of this year's crop'. As Brazil is a major producer of Arabica coffee, more consumers will turn to Arabica coffer beans which are produced in Brazil as they are homogeneous items. This causes the demand of coffee in Brazil to rise from D1 to D2, causing the demand curve to shift right. (Jing Hng)

The oversupply of coffee beans in the Brazilian market could have caused the prices of coffee beans in Brazil to fall as well. This is evident from the news article which says, 'Many Brazilian and Colombian farmers invested to boost production of Arabica to the high prices of 2011, which has added to the oversupply and further depressed prices.' Since the farmers invested in machines like tractors to boost production, the production of coffee beans would become cheaper and they would hence produce more coffee beans. More units of coffee beans could be produced in the same period of times with the machines that the farmers have invested in, cetris paribus. Thus, there will be more output of coffee, eventually leading to the oversupply of coffee in the market. This led the supply curve to shift right from S1 to S2.

]]> 2016-04-04 06:32:26 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256061 Body: Decide the direction and magnitude in which the curves shift lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256062
It is likely that the supply curve for coffee will shift by a larger extent than the demand curve for coffee. This is because coffee is an income inelastic good as many people find coffee a necessity and they find that they cannot perform without their daily cup of coffee. As a result, a rise in the income of consumers will lead to a smaller than proportionate increase in the demand of coffee, causing the demand curve to shift by a small extent.  On the other hand, the use of farming equipment by farmers makes the supply of coffee more elastic as they are able to produce more units of coffee beans in a shorter period of time. Hence, the supply curve will shift by a larger extent.]]> 2016-04-04 06:34:27 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256062 Body: Using the market adjustment process, explain how the shift(s) changes the equilibrium price and quantity (Explanation of diagram): lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256063 The shifting of the supply and demand curve results in a surplus of coffee beans by QsQd units. This causes a downward pressure on the price of coffee beans. As the price of the coffee beans decrease, the quantity of coffee beans increases and this gradually eliminates the surplus of coffee beans.]]> 2016-04-04 06:35:51 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256063 Body: State the new (final) equilibrium lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256064 The market adjustment process causes a new equilibrium, E2, which is at the intersection of D2 and S2. At E2, the market price for coffee beans is now at P2 and the market quantity for coffee beans is now at Q2.

(Hazirah)]]> 2016-04-04 06:38:13 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256064 Conclusion lee_xueting https://padlet.com/lee_xueting/16A03GROUP1/wish/104256065 All in all, the change in supply and demand of coffee beans reinforce each other, causing a decrease in price of coffee beans and a steep increase in quantity of coffee beans in the market of Brazil.

]]> 2016-04-04 06:38:57 UTC https://padlet.com/lee_xueting/16A03GROUP1/wish/104256065