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.

Strong demand for entry-level coffee which is 40% of the world's coffee crop is robusta bean which has enabled Vietnam to go from almost nothing a decade ago to producing 25m bags today. As robusta bean is cheaper, consumers will switch from arabica bean to robusta bean. This rise in demand for robusta bean will lead to a fall in demand for arabica bean, ceteris paribus.
or
Robusta bean is a cheaper alternative to Arabica bean which most of the producers in Brazil produce. Due to the change in taste and preference of consumers, consumers will switch from arbica beans to robusta beans, ceteris paribus. This rise in demand for robusta bean will lead to a fall in demand for Arabica bean, ceteris paribus. 

Recession is a slowdown or a massive contraction in economic activities. Economic recession is a period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market. As a result, the income of the people decreases and their purchasing power as consumers decreases. Hence, there will be a decrease in the demand for arabica beans.


Nicholas:
Cost Of production

In extract 1 ‘’To make matters worse for arabica growers, falling prices have been accompanied by rising costs: coffee is still largely picked by hand, and wages are rising fast in Brazil and Colombia. ‘’ This is because of the increase in wages would lead to an increase in cost of production of Arabica coffee beans. Farmers would thus, opt to produce less Arabica beans to avoid loss of profits. As a result the market supply decreases. There is a decrease in supply as seen in a leftward shift of supply curve S to S2.