Coffee Bean Market - Arabica by XueTing Lee https://padlet.com/lee_xueting/16S12GROUP3 en-us 2016-04-06 02:42:11 UTC 2023-06-02 14:02:47 UTC hello@padlet.com News Article 1  lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270697 2016-04-04 05:48:50 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270697 News Article lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270698 2016-04-04 05:51:11 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270698 With reference to the 2 news articles,  explain the fall in prices of coffee beans in Brazil. lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270699

]]> 2016-04-04 05:52:46 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270699 Group name: lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270700 Please write out the names of the members in the group.
1. Harisa
2. Chloe
3. Victoria Kang
4. Dephanie]]> 2016-04-04 06:03:43 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270700 Topic: Demand, Supply & Market Equilibrium lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270701 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/16S12GROUP3/wish/104270701 Welcome:) lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270702 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/16S12GROUP3/wish/104270702 Introduction lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270703 Explain market mechanism:
Market for Arabica coffee beans can be affected by changes in both demand and supply of Arabica coffee beans.

Define demand:
The effective demand for coffee beans refers to the quantity of coffee beans that the consumers are willing and able to consume in a given period of time at various price, ceteris paribus.

Define supply:
The effective supply of coffee beans refers to the quantity of coffee beans  that the producers are willing and able to offer to sale in a given period of time at various prices, ceteris paribus.]]> 2016-04-04 06:30:11 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270703 Body: State the initial equilibrium lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270704 Initially, the market is in equilibrium at E1 at the intersection of demand (D1) and supply (S1). The Initial equilibrium quantity is Q1 and the initial equilibrium price is P1.]]> 2016-04-04 06:31:44 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270704 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/16S12GROUP3/wish/104270705 Demand: "40% of the world's coffee crop is now robusta beans-has enabled Vietnam to go from almost nothing a decade ago to producing 25m bags today." 
Substitutes are goods that satisfy similar needs or desires within the same price range. Robusta coffee beans is a substitute for Arabica coffee beans. As the price of robusta beans is relatively lower compared to that of Arabica beans, consumers may switch to robusta coffee beans. This will thus affect demand for Arabica as demand of Arabica coffee beans will fall, ceteris paribus.

Demand: "The recession in Europe has hit demand and squeezed profits for roasters." Recession is a fall in Gross Domestic Product for two successive quarters in Europe.  This, it causes a fall in income for households, resulting in households having a lower purchasing power to afford the more expensive Arabica beans. As they are unable to afford the Arabica beans, people are less likely to want to buy them. This decreases the demand for Arabica coffee, ceteris paribus, assuming that Arabica beans are luxury goods. 


Supply:  ''Good weather in Brazil means that this year's crop has turned out to be unexpectedly large.''  Good weather provided optimal conditions for the crop to thrive, resulting in the crop production to increase. This increases the supply for Arabica coffee, ceteris paribus.

]]> 2016-04-04 06:32:26 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270705 Body: Decide the direction and magnitude in which the curves shift lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270706 Thus, there will be a leftward shift of the demand curve from D1 to D2 and a rightward shift of the supply curve from S1 to S2. The extent of the fall in demand is greater than the rise in supply.

In this case, recession in Europe causes the decrease in income. This causes a decrease in the purchasing power resulting in the fall in demand, assuming that Arabica coffee bean is a normal good. 
Thus, impact of fall in demand is greater than the impact of rise in supply on the equilibrium price and as a result, equilibrium price will fall.  ]]> 2016-04-04 06:34:27 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270706 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/16S12GROUP3/wish/104270707 At the original price P1, the simultaneous fall in demand and rise in supply with the extent of the demand being greater than the rise in supply creates a surplus of QsQd as quantity supplied now exceeds quantity demanded.
This exerts a downward pressure on price as producers are willing to offer lower prices to get rid of the surplus.
As price falls, quantity demanded rises while quantity supplied falls. 
The surplus is gradually reduced as prices reach P2.
This continues until the surplus is completely eliminated at the new equilibrium E2 where quantity demanded is again equal to quantity supplied.]]> 2016-04-04 06:35:51 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270707 Body: State the new (final) equilibrium lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270708 Finally, the market is back in equilibrium at the intersection of the new demand curve (D2) and the supply curve (S2). Market clears at the new equilibrium point E2, equilibrium price falls from P1 to P2 and the equilibrium quantity falls from Q1 to Q2.

]]> 2016-04-04 06:38:13 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270708 Conclusion lee_xueting https://padlet.com/lee_xueting/16S12GROUP3/wish/104270709 The fall in demand and rise in supply  cause a fall in equilibrium quantity. However, the effect on equilibrium price is indeterminate and depends on the relative extent of the shifts in demand and supply. 
In this case, the fall in demand is greater than the rise in supply, This is because there is a recession in Europe, meaning there is a fall in Gross Domestic Product for two successive quarters. People's income will fall, and they are more likely to purchase the relatively cheaper Robusta coffee beans as their purchasing power for Arabica beans fall. Therefore, no matter how much supply of Arabica beans there are in the market, consumers would tend towards the cheaper alternative, which is the Robusta coffee beans. Therefore, high supply of Arabica coffee beans will not have a significant impact on the demand for Arabica coffee beans as long as Robusta coffee beans are still in the market. 
In addition, as Arabica coffee beans are considered luxury goods, demand for Arabica coffee beans are income elastic. This implies that the fall in income will lead to a more than proportionate fall in demand for Arabica coffee beans, ceteris paribus. 
Hence, we can expect the extent of the fall in demand to be greater than the extent of rise in supply of Arabica coffee beans. Hence, with the extent of fall in demand being greater than that of the rise in supply, equilibrium quantity and price will fall.

]]> 2016-04-04 06:38:57 UTC https://padlet.com/lee_xueting/16S12GROUP3/wish/104270709