Coffee Bean Market - Arabica by XueTing Lee

Chat Box

lee_xueting — 2016-04-04 06:39:46 UTC

Mr Wong: guys start filling in the different segments
Mr Wong: good, pls follow the allocation of the parts that you need to do individually
but someone needs to tally overall so that no points contradict
Zhen Yu: Mr Wong whats the difference between "Body: Decide the direction and magnitude in which the curves shift" and "Body: Identify and explain whether the factor/event shifts the demand or supply curve. (2 Demand + 1 Supply or 2 Supply + 1 Demand)"?
Mr Wong: Body: Decide the direction and magnitude in which the curves shift --> Quote from article and explain the factor
Identify and explain whether the factor/event shifts the demand or supply curve. --> this one just state whether demand or supply shifts left or right, ceteris paribus
Zhen Yu: Is this a double shift? --> yes, if you have identified both demand and supply factors

Conclusion

lee_xueting — 2016-04-04 06:38:57 UTC

The rise in supply and the fall in demand causes for a smaller fall in equilibrium quantity from Q1 to Q2. However, the effect on equilibrium price is indeterminate as it depends on the relative extent of the changes in demand and supply. The fall in demand in greater than the rise in supply because the recession severely affects consumers' demand for arabica coffee beans due to more cheaper alternatives. The supply increases because of good weather and this leads to a surplus in the supply for arabica coffee beans.

Body: State the new (final) equilibrium

lee_xueting — 2016-04-04 06:38:13 UTC

Demand curve shifts to the left from D1 to D2 and the supply curve shifts right from S1 to S2. At original price P1, the quantity supplied is more than the quantity demanded. A surplus occurs, causing a downward pressure on price. As price decreases, the quantity demanded rises and quantity supplied falls until the new equilibrium is met at E2

Body: Using the market adjustment process, explain how the shift(s) changes the equilibrium price and quantity (Explanation of diagram):

lee_xueting — 2016-04-04 06:35:51 UTC

The original supply curve and demand curve were at S1 and D1, equilibrium price was E1 and equilibrium price and quantity was at P1 and Q1 respectively.
There is a rightwards shift of the supply curve from S1 to S2 and a leftwards shift in the demand curve from D1 to D2.

Body: Decide the direction and magnitude in which the curves shift

lee_xueting — 2016-04-04 06:34:27 UTC

There is a leftward shift of the demand curve and a rightward shit of the supply curve.
The demand curve shifts more than the supply curve

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 — 2016-04-04 06:32:26 UTC

A change in taste and preference of consumers leads to a rise in demand for robusta coffee beans and a fall in demand for arabica coffee beans. This is seen from article 2 "The reason is that production of coffee, and of cheaper robusta beans in particular, is booming. " This causes a leftwards shift of the demand curve, ceteris paribus.

Recessions in Europe caused a fall in income level, leading to consumers choosing cheaper alternatives over the arabica beans brewed in Brazil. Coffee is seen as a normal good and hence has a income elasticity of demand or 0
Due to good weather in Brazil, supply of arabica beans increased significantly. This is seen in article 2 "And good weather in Brazil means that this year's crop has turned out to be unexpectedly large". This leads to over-production of coffee beans and hence causes a shift in the supply curve to the right, ceteris paribus.

Body: State the initial equilibrium

lee_xueting — 2016-04-04 06:31:44 UTC

Initial equilibrium is at E1 where original price and quantity is P1 and Q1 and the demand and supply curves are D1 and S1

Introduction

lee_xueting — 2016-04-04 06:30:11 UTC

Explain market mechanism: The interaction of the market forces of demand and supply to determine the equilibrium price and output.

Define demand: Demand is defined as the amount of good that consumers are able and willing to purchase in a given period of time at various prices

Define supply: Supply is defined as the amount of a good that producers are able and willing to offer for sale in a given period of time at various prices.

Welcome:)

lee_xueting — 2016-04-04 06:06:48 UTC

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.

Topic: Demand, Supply & Market Equilibrium

lee_xueting — 2016-04-04 06:04:45 UTC

Objective - Students will be able to identify and explain how the demand and supply factors affect the market for coffee beans.

Group name:

lee_xueting — 2016-04-04 06:03:43 UTC

Please write out the names of the members in the group.
1. Zhen Yu
2. Amir
3. Syamir
4. Shirin
5. Fiona

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

lee_xueting — 2016-04-04 05:52:46 UTC

Over-production of arabica coffee beans lead to a fall in price of coffee beans.

Changes in consumers' tastes and preferences leads to a fall in price of arabica coffee beans.

Recessions in Europe leads to a fall in demand of arabica coffee beans.

News Article

lee_xueting — 2016-04-04 05:51:11 UTC

News Article 1

lee_xueting — 2016-04-04 05:48:50 UTC