It's the summer after my Freshmen year and right now I'm taking Macro. I aced the last test and today's test seemed pretty easy until this one caught me off-guard for some reason (it may have been how the teacher worded it, but IDK):

And then here is roughly the question:

So I sat there for ten minutes starring at a demand and supply curve I drew. Then I gave up and said "Supply must have decreased or demand must have increased." But I think she wanted more than that because it was worth like 1/6 of the whole quiz.

First you should make the (obviously intended IMO for an intro course) assumptions that the consumer price of coffee increased with the price of beans (and that the amount of consumer coffee per unit of beans was close to constant), although you can discuss alternatives there as well if you want to.

After you make that assumption, then demand obviously had to increase. More was consumed at a higher unit price (more at a lower price could just be a different quantity demanded point on the same demand curve). Supply could have done anything- obviously the quantity supplied has increased, but you don't have enough information to know if the supply curve shifted (in either direction) or if it was just a QS increase because of the higher unit price it was selling for.

Isn't this micro?

I'll get the results back next week.

No, it is Macro but she said it could be both. We touched on supply and demand but now we are in the business cycle, which is apparently strictly macro.

This is incorrect. What you should do in an intro course is figure out whether the change affects the supply curve or demand curve. In this case, the cost of beans is an input to coffee, so it affects the seller's decisions, so it'll affect the supply curve. That will shift the supply curve left. If the demand curve doesn't shift, then the quantity of coffee will decrease but the price increase.

Note the result is the same as TC wants you to assume. But the increase in price should be a *result* of the model, not an *assumption* you make.

The question does to on to say coffee consumption increased as well, so does that mean the supply curve shifted or demand? Which way? More or less than the supply curve shifted (I think that's the hardest part of that Q--you have to see the demand curve shifted more than the supply to counteract the shift in the supply curve.


I've seen many books have a micro intro, since S+D concepts are used later in the text. I don't think going into *that* much detail about S+D curves is required, since in macro there are usually just a small number of things that will shift a supply or demand curve. So instead of going through all of the general things that'll change the curves, I think putting those off and dealing with the shifters as they come organically is best. But that's an opinion.

Pretty standard ridiculous question- 1 provides you a metric to measure change, the other states unqualified information. On a deeper analysis, you should be asking about the newspapers aims, as it is the reports which should be analyzed.
But then your trying to supply sense to economists, which basic macro truly hates.
As an aside i'd say if you continue doing economics, you'll find that intro courses are constantly contradicted over the next few years.
As is usual, i'd demand extra information.

Which is giving 'unqualified' information. It's pretty straightforward to understand what it means for the price of coffee beans to increase, as well as noting that the overall quantity of coffee consumption is increased.

I've always said on these boards and other places that it's important to know the basics before you go off and try doing the 'deeper analysis' that you're suggesting. I know there's lots of people on these boards that differ, but their lack of knowledge of the basics shows in their 'deeper analysis'.

One last thing--I would differ with things being contradicted over the next few years. You might have different models with different results, but that's not really contradicting. That's just going from more basic models to more complex models. You're not going to learn it all in Econ 101, just like you're not going to learn it all in Physics 101.

You're assuming ceteris paribus here when it's not in the problem (or at least not in the text that we got).

You have two different goods: coffee beans and coffee. Each one has its own supply and demand curve. The information you know is that:

1) The price of coffee beans (use to produce coffee) tripled from 2010 to 2011.

2) Coffee consumption rose dramatically from 2010 to 2011.

Based solely on that, do you know if the demand went up or down for coffee beans? No. Do you know if the supply went up or down for coffee beans? No. Do you know if the demand went up or down for coffee? No. Do you know if the supply went up or down for coffee? No. You can exclude some combinations, like the supply of coffee beans going up and the demand for them going down, but that's it. You can't deduce what any one of the four things actually did.

If you want to have a concrete answer for any of the 4 things, you have to pull something out of your ass. I chose to pull "price increased" and answered the "if price and quantity increased, what could have happened to S+D?" question because that's the only way to have enough information to answer any part of the question deductively without simply assuming one of the answers outright. You pulled "supply decreased" and answered "if supply decreased and quantity increased, what happened to S+D".. which is probably actually the answer the teacher wanted. And if the text that we didn't see said anything about ceteris paribus, then it's definitely the right answer because it actually does become deductive at that point and not just "what could have happened to supply? I assume it went down, therefore it went down".

This is silly. The model is the relationship between the change in supply, the change in demand, the change in quantity, and the change in price. None of the four have any privileged status, and both of our results were deduction from one data point (change in quantity) and one assumption of another factor.

Given the question, I'd be willing to lay pretty long odds that ceteris paribus was intended to be assumed. I'd also say most questions in these intro-type classes assume that without actually saying it in *every* question asked. It's more or less a blanket assumption.

Yes, that's the point--I think you jumped from something that happened with one good to what happened to an outcome with the other good/market without anything in between.

But if we're looking at the coffee market, we don't need to know what happened in the market for coffee beans, just the outcome. So in the intro macro/micro classes, your first two questions here are moot. We can know the supply of coffee went down because the price of an input went up. Using the fact that consumption went up at the same time the supply decreased, we are left with logically deducing that demand went up.

I can guarantee that's what the correct answer is here.

Or instead I can read the givens. Seriously, pull out a intro econ text. Look at things that can shift supply, and you'll see 'price of an input' as something that shifts supply. Nothing 'pulled out of anyone's ass'. It's the model!

Yes, that's what the teacher wanted, because that's the model. They're studying the model.

And for below, the text I'm sure at least implicitly assumes ceteris paribus. If not, then we can assume just about anything we want (transportation costs decreasing, price of tea increasing, etc...) and get any result we want. Hence, ceteris paribus is assumed. It is definitely not said in *every* *single* question asked in the text. But again, I'll lay pretty long odds on this (hopefully I have my terminology down correctly)

No it's not silly. You're getting the inputs of the model confused with the outputs. There are definitely things that have privileged status. By you saying that, I believe you don't actually understand fully what demand and supply curves are. The inputs are demand and supply (demand being the quantity of good demanded at any price, so it gives one relation between quantity and price). These *determine* quantity and price. There's definitely a privileged place for the curves.

Again, pull any intro text; it will say that to determine what happens in a market when changes happen, first determine which curve(s) shift(s) and in which direction(s). Second draw the new curve(s) and find the new equilibrium. *Finally*, determine what happened to the quantity and price.

Note the hierarchical structure there--price and quantity are an outcome, a result of the model. The S+D curves are inputs.

Am I wrong or is this just a supply shock case?

Demand shifts outwards to a higher price establishing a new equilibrium (short run)

This cannot be sustained due to supply of coffee worldwide therefore in the long run it moves back towards Quantity (original) but an even higher price.

Correct me if I am wrong

Up to here, ok--there is a supply shock from the price of coffee beans. But there's an associated demand shock too (that one has to figure out from putting the supply shock together along with the increased consumption)

That last part is wrong. At the new equilibrium price, the quantity of coffee supplied equals the quantity of coffee demanded, so everyone is happy where they are. There is no reason to change--and no pressure to change. That's why it's called an equilibrium.

Yes, there could be other real-world issues that the simple question in an intro class isn't considering (that's not really directed at you, hotwings) but that is beyond the scope of the question as asked. They could be taken into account, but it's not being asked.

I agree it's highly likely to be the intended answer.



You're missing what i'm saying here. It's tautological that if supply goes down and demand goes up, price increases. It's tautological that if quantity and price both go up, demand must have increased. It's literally impossible (in this model) for the conclusion not to follow. The logic can flow both ways.

If you want to know what happened to demand, you don't have to know of any factor that would change demand. It's perfectly sufficient to know price and quantity increased to deduce that demand must have increased. You can either look for a factor that must have changed demand or deduce it from changes in outputs. Both are (equally) valid logical conclusions.

You're kind of getting the logic wrong. You could say that an increase in demand and/or a decrease in supply *causes* an increase in price. But the price/quantity combination doesn't *cause* the curves to shift. One's an input, one's an output.

And yes, I see what you're saying. But--it's a different logic going forward than backward. I almost want to say its like deductive versus inductive reasoning, but I'm not 100% sure of the terminology.

Well, you're getting quite a bit off track here. To remind you, you claimed that none of supply, demand, quantity or price enjoyed a privileged position in the model. I replied (correctly) that was incorrect--supply and demand curves are inputs and they are used to determine the outputs--quantity and price.

Sure, you can determine that D increased if Q and P increase, but again, the Q and P didn't cause the increase in D, rather D caused the increase in Q and P. Hence, D and S enjoy a privileged position in the model.

It's exactly the same logic- both are deductive- and I never said *caused*. I said knowing p/q increased was sufficient to know demand increased, even if I have exactly zero idea what *caused* demand to increase. If f(x)=x^3, then saying an increase in x implies an increase in f(x) is exactly the same kind of logic as saying that an increase in f(x) implies an increase in x.

To be more specific, I said that about changes in any of those four. And they don't. The input/output distinction is completely meaningless here. There's no reason the change in an "input" can't be deduced from an "output" or vice versa.

Actually what you said was "First you should make the (obviously intended IMO for an intro course) assumptions that the consumer price of coffee increased with the price of beans". That's where this started, and that's where you minimally skipped over several important steps.

And your last paragraph may be the issue. I see meaning behind the models. You seem to just see a line (I mean, you did use the analogy to f(x) = x^3). It's the meaning and intuition that adds the richness to the model that it deserves. BTW, I never said you couldn't deduce one from the other--I specifically said you could, so I don't really know why you're arguing that. What I was saying is that the model treats one as an input and one as an output. Hence, the quote of yours I have inline in my text was wrong, and that's what I was replying to. That is a wholly unsubstantiated claim--we obviously are allowing the demand to change as well.

Further, the question asks how the supply and demand were affected/how they changed. Saying the price of coffee increased 1. does not immediately follow and 2. the price of a good does not shift that good's demand or supply. So from 2. the observation that the price of coffee increased is completely immaterial to the question. Worse, it's just an assumption which could be wrong (it isn't in this case). So you're just making an assumption that could be right or could be wrong, and then using that to deduce the change to D or S. *That* is what I took issue with. In fact, if you look at my answer, unless I cut it short, I specifically said that you look at the change in output and that tells you D must have increased. So going backwards wasn't the issue, it was the blind jump you took in step 1.

What does this even mean? I see meaning to the models too, but that doesn't mean that the logic of what certain changes imply is anything more than the same basic logic used in math.


Except it's not- once assumed, given the other data point that quantity increased as well, it allows you to deduce that demand went up without making any assumptions about supply. And you're stuck in your cause-effect trap again for at least the second time here when you call the observation immaterial- price increase doesn't CAUSE an increase in demand- it logically requires that demand have increased (given the +q in this example). The direction of causation is completely irrelevant for deduction.

Exactly. And I take the same issue with assuming a decrease in supply, barring an explicit statement of ceteris paribus. I've conceded that the teacher wants what you have to say, not that it (or mine) follows logically from the given text, because it clearly doesn't.

What? Q can go up if you have an increase in supply too. You have to be a little more careful in your thinking...

There's no cause-effect trap. I've said you can deduce this. But what I had issue with was your statement in the second post. Can we stop obfuscating and get back to that issue if you wish to carry on?


Protip: sometimes questions require standard assumptions to solve the problem. Most of those times those assumptions are unstated.

If you don't apply that tip to almost anything, you can always come up with 'issues' that make problems unsolvable. Ceteris Parubis is probably the most commonly made assumption and is usually unstated for that reason.

Um, my thinking was fine... you're reading something I didn't write. If price went up and quantity went up, then demand went up. There's no way you're actually intending to disagree with me on that.

The only obfuscation is you abandoning your insistence that there's such a thing as privileged status (instead of an x:f(x)-like relationship) and calling 2 instances of deduction different kinds of logic to bring up things that a) aren't relevant to those points and b) aren't in dispute.

Well, you only talked about Q going up in that sentence, so how am I supposed to assume ceteris paribus and what you're assuming, blah blah blah.

And in the question, we weren't given that the price of coffee went up--your logic just pulled that out of your ass, so I was dismissing that assumption as unfounded. As such, we can't assume the price of coffee increased, and therefore we can get two ways to increase Q. That was my point. So you're reading or inferring things that aren't there.

To get back to the main point, your 'solution' is making a lot of assumptions. My solution uses the models to deduce what happened in the market in a logical fashion using the models. *That* is the main point and what you're obfuscating.


I'm not abandoning that. You're reading something I didn't write.

The only obfuscation is that you're continuing to ignore your original error which I pointed out earlier.

Jesus christ man.

Two things. Exactly what I said.

"A lot" being exactly one, just like yours, as already established more than once.

I have no idea why you're still going on about this. The one incorrect statement that I made ITT (that the assumption was obviously intended), I've owned up to multiple times, starting with my first reply to you, with no attitude. I have no idea how "I agree it <what you said> is highly likely to be the intended answer." and "I've conceded that the teacher wants what you have to say" can be taken as evidence of ignoring it.

You've made, by a current count, at least 13 incorrect statements ITT (counting repeats of the same incorrect point), owned up to exactly none of them, and acted like a bigger and bigger dick with every post. God knows I've been a condescending douche to people on 2+2 before, because it's funny as a style of owning complete idiots who are wrong about everything while being full of themselves (steelhouse, jdonk99, Felix, clfst17, etc), but I don't think you realize which part you're playing right now. You're being a grade-A toolbox while spouting off complete nonsense ideas (privileged positions, different kinds of logic) while screwing up basic reading comprehension and basic logic.

The trouble with that sentence is that my 'assumption' is well-founded. It's the typical and common assumption. Your 'assumption' is akin to pulling something out of your ass. They're not even close to similar.

lol. 13 incorrect statements? Wait, you're talking about something I wasn't claiming as fact, just as metaphor (the logic) as something incorrect. Well, I guess if you want to make things up to call me incorrect, have at it.

BTW, part of the problem is that you've introduced non-standard terminology ("privileged") that you haven't defined. Maybe I should have asked WTF you mean by that, true, but to say that Supply and Demand is considered exactly like price and quantity in these models occupy the same place is lol bad. As I've said and you've ignored, yes, you can determine something about S or D knowing what happened to P and Q. But that doesn't change the fact in the model S and D are inputs and P and Q are outputs. That's what I've said--given my interpretation of how you're using the words you're making up. It's on you to clarify if you want.

BTW, TC, if you look at the thread, you posted something incorrect in post 2, I pointed it out and gave the correct answer in post 4. For some reason, you decided to argue against the correct answer in post 7. Then added on top of that a bunch of crap (obfuscation) about what's 'privileged', irrelevancies about what is happening in the coffee bean market and so on.

If you want to say I wasn't following you correctly, well, that's because it was like trying to follow a drunk down the street. It was all over the place. If we get back to the core and stop talking about all these stumbles left and right, I'm very confident in my role.

Basically it doesn't look like you've admitted something. That would be saying something like "yes, post 4 is right". What's happened here is basically something like 'well, this was wrong, but what about this, that and the other thing (stuff like what's 'privileged' and the sort)'

ROFL. Never go full steelhouse.

This is complete nonsense. If I want to deduce something about demand, I can deduce it from any set of information that allows me to deduce it. In steel_monster land, if I know the quantity of Lucky Charms has increased, and know the price of 27 other cereals have increased significantly and none I know have decreased, it's completely inappropriate for me to make the assumption that the price of Lucky Charms also went up and conclude that would mean that the demand for Lucky Charms also went up. Because, uh, result of the model.

Yeah, how about no.

How about that. You seem to have enough of an idea what the words mean to say there are *definitely* such things, but after it becomes clear that your conception is complete nonsense, you start acting like a little bitch and saying the words that YOU used repeatedly aren't actually defined. And blaming me for your use of words you don't understand.

Right. x is privileged over f(x) when it comes to deduction of changes.

.....

Just.. wow. I guess this is an improvement over the #4 where you were DEFINITELY sure and also completely wrong.

And... no. I was talking about changes in those four things for use in deduction. (see next entry)

Your reply is a complete non sequitur because you couldn't keep straight in your head, even while quoting the following text "The model is the relationship between the change in supply, the change in demand, the change in quantity, and the change in price. None of the four have any privileged status" that I was talking about changes.

And for the nth of many times, you think causation is relevant to anything I've said ITT.

Causation-deduction fail again, covered in post 15.

Total reading fail, again. Covered in post 17

One.

Projection much? Have you admitted ANY of the following?

1) That there aren't "different kinds of logic" going forwards and backwards

No, of course not. And instead of admitting it, you pull a total Jon Kyl-inspired bitch move 2) That I've said multiple times what the intended answer is

No, of course not. You've quintupled down (at least) on the derp.

I didn't "argue against the correct answer", I said that your solution didn't follow from the text of the question, which it doesn't, and said repeatedly throughout the thread, including in that post, that yours was still the intended answer, but I guess such subtleties can't be comprehended in steel_monster land. Or was that just another of your statements that "wasn't intended to be factual"?

I never asked anything resembling "What about <another idea>?". Nothing in my position, except what the intended extra assumption was, has changed at all from my first post to now. Well, I guess that's not completely true. The longer this goes, and the more simple points you fail to understand and completely ******ed "points" you try to make, the more I'm really starting to wonder if you actually are a complete idiot who can regurgitate a few things or if you're just playing one now to cover up your nonsense from earlier.

That's good advice you want to take.


Given the question as presented, yes. Remember, we're talking about Econ 101 here, not whatever fantasy world you want. We have to crawl first before we walk, before we run. It looks like (from your post #2) you're still at the learning to crawl stage.




Yeah, how about looking at posts 1, 2, 4, and 7.

I'm using YOUR made-up words. If you've got a strange definition for them, that's on you, not me.

When you're not right, continue obfuscating! (see your entire post I'm replying to)

OK, there's one, I should have said different kind of logical argument. Shame on me for leaving out a word!!!

And I did use the word "like" which implies a simile (not metaphor as I said earlier, so congrats, you got me again!!!!)

Unfortunately, post #2 is still staring you in the face.

This is hilarious. I did admit, many times, that you posted the intended answer and that I didn't. If you'd left it at that, that would have been the end of it, but instead you also posted something stupid, got called on it, and instead of just admitting that, like I did, when the thread would have ended in post 8, you totally spazzed out and got completely owned on that and every subsequent point as you spiraled into full meltdown and quit even trying to make any sense.

Unless you think all kinds of logical argument are different- namely that

1) All Dachsunds are dogs. Molly is a Dachsund. Therefore Molly is a dog.
2) All cats are in family Felidae. All Russian Blues are cats. Molly is a Russian Blue. Therefore Molly is in Felidae.

are different kinds of logical arguments, in which case your "point" is so meaningless that you would have had no reason to state it in the first place, you're *still* ****ing this up. You even thought the two arguments should have different formal names/labels, even though they're both just simple logical deduction.