Group 7 by Lydia Ashton

lydiaashton1 — 2024-10-11 16:07:33 UTC

Introduce the chosen news article and its source.
Provide a brief overview of the main points discussed in the article.

lydiaashton1 — 2024-10-11 16:07:33 UTC

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.

lydiaashton1 — 2024-10-11 16:07:33 UTC

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.

lydiaashton1 — 2024-10-11 16:07:33 UTC

Identify and explain relevant economic concepts related to the article.
Describe how the article ties into class economic principles.

lydiaashton1 — 2024-10-11 16:07:33 UTC

- 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.

lydiaashton1 — 2024-10-11 16:07:33 UTC

- 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.

INTRO

2024-10-23 18:13:35 UTC

This article covers a very common conflict that almost every person and family go through every week, the decision to eat out versus eating at home and the financial trade-off between the 2 options. The sources used in the article are One Poll and the Bureau of Labor Statistics.

INTRO (cont.)

2024-10-23 18:17:03 UTC

Eating at home is generally considered more economically savvy than eating out but factors like time, convenience, and health play a major role. Americans spend around $2,500 to $3,600 per year on fast food which adds up a lot compared to grocery spending, especially when you realize that cooking at home leads to leftovers and more healthy and controlled meals. With the rise of food delivery apps and their over the top fees and shrinkflation reducing the amount of food we get from eating out, the "McDonald's at Home" seems like the smarter and healthier option.

Relevant Economic Concepts (Opportunity Cost and Trade-Offs)

2024-10-23 18:25:32 UTC

This topic covers many economic concepts about decision making but the most prevalent ones are opportunity cost and trade-offs. Choosing between eating at home or eating out is based on which option has the lower opportunity cost. Price is not the only factor considered though, with time spent cooking, convenience, and happiness also playing a role. Eating out is easier for a lot of families especially with working parents who are exhausted after a long day of work and many times it is the easiest and best option for families. This decision however comes with the trade off of spending much more money eating out than cooking at home, so the choice to eat out should be done in moderation in order to stay financially smart.

Economic Concepts - Price Elasticity of Demand

2024-10-23 19:29:46 UTC

A factor that is also at play here is the Price Elasticity of Demand, which is how much the quantity demanded of a good changes in response to the price changing. In the article it is implied that fast food has relatively high elasticity for the normal consumer, however for people who prioritize convenience, the demand for fast food is more inelastic. This means that as prices continue to rise, people will generally eat less fast food but when people need a convenient meal they will always go to fast food because the saved time is worth the extra cost

Graphic Explanation

2024-10-23 20:01:45 UTC

In the beautiful Microsoft Paint image above, the blue line is the supply for fast food and the red line is the original demand for fast food. The orange line is the new demand after the increase in price for fast food. Because of inflation and shrinkflation, the demand curve might shift to the left for consumers who decide to eat at home rather than eating out.

Analysis

2024-10-23 20:07:45 UTC

The model suggests that as prices rise, the demand for fast food should drop because people try to avoid high prices. This aligns with the articles point that many people will shift to cooking at home, however the true outcome is not as easy as that. The graph does not factor in how much people value convenience and that the demand for fast food is more inelastic. So while the model predicts a decline in demand, those who keep eating out because of time and convenience will continue to eat out at the same rate they do already.

Current Situation

ogoneil — 2024-10-25 17:21:40 UTC

Today, it costs an average of $16.28 to eat a meal at an inexpensive restaurant. The pros that people experience when eating in are the cost, nutrition control. The pros of eating out are the connivence, chef quality food, environment/experience. It is often the better choice to eat out when you have a very busy schedule (or having to coordinate many people's schedules). It is mostly the better choice to eat at home when health is important, you have the time to cook, there is a large number to feed. In Wisconsin, the average cost of eating at home is $3.53, whereas the cost of eating out is $15. This is a very large difference, and the costs can add up quickly.

Past Situation -- Pandemic

ogoneil — 2024-10-25 17:30:23 UTC

During the Pandemic, many individuals and family eating behaviors changed. People had more time to cook, and less incentives to go out and buy food. They were home more, spent less time commuting, and had less activities to work around to find time to cook. One study found that before the pandemic 55% of people ate fast food. During the pandemic, the percentage of people who never ate fast food increased from 35.4% to 51.5%. Not only did people eat less fast food, more consumers now report that they enjoy cooking more than they did pre-pandemic which probably encouraged more people to eat in even after the pandemic was done.

ogoneil — 2024-10-25 17:33:12 UTC

This graph is a representation of the demand for fast food during the pandemic. Consumers preferences and other external factors made the demand decrease.

ogoneil — 2024-10-25 17:33:55 UTC

ogoneil — 2024-10-25 17:36:20 UTC

ogoneil — 2024-10-25 17:36:38 UTC

Market Failures

ogoneil — 2024-10-25 17:42:04 UTC

In the conversation of fast food vs. eating in or more nutritious options, fast food is generally seen as an easy, cost efficient option. Many people in lower socio-economic classes find this is the easiest way to get fed for them and their families. They find that given they have to work full time, even more than one job, the easiest solution is getting fast food. Even though they feel this is the best decision, it is not nutritious or very sustainable. There have been movements by the government to try to get children to eat less fast food by putting standards in place for many public schools.

Externalities

ogoneil — 2024-10-25 17:46:29 UTC

Potential unintended consequences of eating fast food/eating out would be the health consequences compared to eating home cooked meals that are more nutritious and have healthier portion control. It could also have a negative impact on the environment because it increases greenhouse gasses and water consumption. Eating at fast food places rather than eating out at places that may be better for you and the environment can make it harder for local, small businesses to stay in business and continue their operations and missions.

Analysis

ogoneil — 2024-10-25 17:48:33 UTC

These factors would create deadweight loss because eating fast food produces negative externalities. Negative externalities mean that the social cost of the action is more costly than the private social cost. People do not think of these extra costs because they are not the ones facing them. One method of government intervention to help this would be putting a higher tax on fast food so that less people would buy it.

ogoneil — 2024-10-25 17:49:05 UTC

Positive analysis

ogoneil — 2024-10-25 17:53:07 UTC

Fast food is a very convenient option for people who are busy and need something affordable and quick. However, eating in is efficient for people wanting quality control over their meals and ingredients, and economical in the long run. Pandemic numbers show that when people have more time, and less on their schedules, they opt to cook and eat more. Where as pre-pandemic people ate more fast food.

Normative Analysis

ogoneil — 2024-10-25 17:55:00 UTC

People who are thinking in terms of cost, they should consider all the costs of eating in vs eating out. Eating in is the best way to people to get nutritious meals and is the economical choice in the long run. People should continue the eating behaviors experienced during the pandemic in post-pandemic life.

Conclusion

ogoneil — 2024-10-25 17:58:02 UTC

In pandemic and post-pandemic life, the efficiency of eating out vs eating in has definitely increased. Eating less fast food and eating out less, in general, is better for creating less deadweight loss because it is better for society. The government should tax fast food higher because that would allow the social cost to be considered when people are making decisions on what to eat. The individuals who have more inelastic demand for fast food will continue to eat it, but those that have more flexibility to find alternatives would start to cook more often.