Archive for the ‘Elasticity’ Category

The Boom-and-Bust Story of a Crop Called Guar   Leave a comment


Summary: Guar is a small bean, and it had a recent rise and fall in the marketplace. Besides being an additive to thicken many foods, it’s also used in fracking. When fracking took off, the price of guar rose. As the price increased, Texas farmers started growing a lot of it, until Pakistan and India–which grow 98% of the guar combined–caught up to the demand. As a result, oil companies stopped hoarding it, and the prices dropped. The Texas farmers were left without buyers, and caused a chain reaction of bankruptcy.

Original Air Date: October 9, 2014

Length: 2 minutes 47 seconds

What Could Slow U.S.’s Surging Oil Output? Low Prices.   Leave a comment


Summary: The oil the United States has been pumping has been getting less and less profitable. In North America, oil comes from fracking shale, and after the first initial output, oil companies have to drill deeper and deeper to get to the oil, causing it to be more expensive to access. However, the price of oil is dropping worldwide, and that could mean that the United States could be out of the oil industry, simply because it costs too much to produce.

Original Air Date: October 10, 2014

Length: 2 minutes

High Prices Aren’t Scaring Consumers Away From The Meat Counter   Leave a comment


Summary: A discussion of the factors impacting supply and demand of pork. Includes consideration of behavior of retailers and consumers in respond to changes in the market.  Considers influences and impacts of related goods.

Original Air Date: August 26, 2014

Length: 4 minutes 22 seconds

Discussion Prompt: In this podcast, what factors are driving the increase in the price of meat?  How does this relate to supply/demand factors that we are studying? Can you give two specific examples of other factors of demand or supply that might impact the price of meat? For each example, name the ‘factor of demand/supply’ and give a specific example.

Follow-up Prompt: Review the posts of your peers, comment on the accuracy of their suggestions and try to add more examples and expand on their ideas.


An Economist Gets Stoned   3 comments

packets of medical marijuana


Summary: Interview with economist Jeffrey Miron of the market for illegal drugs and the economic impact of ‘legalizing’ marijuana through implementation of medical marijuana laws at the state level.

Original Air Date: January 27, 2010

Length 19:03

Main story content begins: 0:00 (Planet Money indicator discusses contribution of marijuana to California economy)

Class Discussion Question: Discuss the conclusions reached in the podcast about the interaction of the elasticity of drugs and drug legalization. What impact do you think this would have on, for example, the marijuana industry when states legalize this product?

Written Assignment Prompt: Marijuana is California’s largest cash crop, with about 1,000 stores selling pot in LA alone.  Predict the supply and demand of marijuana for Los Angeles that would come with the legalization of the drug.

Moonshine Stimulus   3 comments

An anti-Prohibition parade float circa 1925.Link:

Summary: As part of a quest to prove whether President Roosevelt drank Moonshine at the White House, the Planet Money team discusses the history and economics of prohibition.

Original Air Date: August 3, 2010

Length 18:05

Main story content begins:  1:31

Discussion Prompt: Using what you know about elasticity and what you learned from this podcast, what would be your ‘economic expert’ opinion on a proposal to implement a tax specifically on the purchase of marijuana (similar to a tax specifically on alcohol) in the sates where marijuana sales are legal? Connect your economic opinion to details from the podcast. If you use outside information, provide at minimum links for citations.

Follow-up Prompt: A question to expand your application of elasticity ideas: If marijuana were legalized (and taxed), what other markets might be impacted (related goods)?  How might the legalization impact what goods consumers consider to be substitutes for marijuana? Do you think it would change?