Oct 25 2007
Harry Potter Economics…
Published by Jason Welker at 10:46 pm under Supply/Demand,Teaching
Environmental Economics: 6th Grade Econ Question of the Day
Tim Haab at Environmental Economics pulls the following question from his 6th grade daughter’s “economics” homework assignment:
Suppose that a new Harry Potter book comes out and yet again becomes a bestseller. Thousands of people want to read this book. Stores will order more copies of this book from the company that makes it. To fill orders, the company increases the SUPPLY of these books in the marketplace. The increased supply has been made in response to an increased DEMAND for the book.
- If the supply of a new product is low and the demand is high, what will happen to the price?
- If the supply of a product is high and the demand is low, what will happen to the price?
Here’s the answer the teacher wants the 6th graders to give:
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- Price will increase in response to a shortage.
- Price will decrease in response to a surplus.
My question for you is: what’s wrong with this picture? Is professor Haab’s 6th grade daughter being taught good economics? Without following the link and reading Dr. Haab’s entry, see if you can figure out what’s wrong with this question!
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About the author: Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course.
Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this authorNo related posts.
Huh? That violates the law of supply…
Supply doesn't change, but quantity supplied!.
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I think the word "demand" is the word that makes the whole difference. It should be the quantity demanded, since the demand itself means the whole entire curve in the graph, and therefore without a total change of the schedule giving a shift of the curve. Well, I guess in the age of 6th grade it is pretty hard to explain what the difference between quantity demanded and demand is, since it even took me a long time to understand the concepts.
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6th graders take economics? Well I didn't know that -_-
Well, I guess the purpose of this assignment is to learn about the law of supple, just as Tim pointed out…and as we went over many times in class, the question should be worded with "quantity supplied" rather than "supply"
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Haha, guess I came to answer this question too late. Anyway, it is indeed the quantity supplied that changes, not the supply curve itself. Ah well, we were all there once~
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Yes, it's the quantity supplied that changed, because there are no supply shifters, which means that the point is moving along the curve.
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i had to read this question 5 times before i figured out the answer. but yea, it is quantity supplied that changes, rather than supply that changes. but then again, this is a middle school teacher teaching economics. what more can you expect? just kidding.
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I agree with everyone that it is quantity supplied that changes. But the 6th grade teacher is not teaching good economics because there is a big difference between quantity supplied and supply. And if they don't grasp this concept in the beginning of learning economics, learning economics can get a little more confusing for them in the future. If the concept is too hard to understand, why're 6th graders learning it?
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even though im the 8th one to reply to this blog… i wanna say i didnt cheat! i stared at the screen and figured it out myself!
alright so its the Quantity supplied that changes… (and u guys all know that anyway so..)
yea.
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As other people have already said, it's quantity supplied that matters, not just supply. Just supply or demand itself is the graph, but quantity supplied or quantity demanded is a point moving in the curve/graph.
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Took me a while to get it but yes it is quantity supplied. My memory is failing me.
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Like we all said, it is quantity supply rather than suppy, but it is good to learn real basic information about supply and demand in grade 6. if they have real basic information they won't suffer like me in AP Econ class. ^^
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As we all know, PRICE IS NOT A DETERMINANT OF SUPPLY. Price affects the quantity demanded, not the demand curve itself.
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Quantity supplied must change not supply. Cme on guys! I knew the answer before reading what everyone else wrote, but still the whole idea is pretty easy to mess up. Upon first reading it, i thought the ideas sounded pretty good to me :S haha.
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Yeah, it is quantity supplied, not supply, but it took me a long time to figure it out. In fact, I had to look back in my notes to remember what STORES and TOEISS stand for. Subsidies, Technology, Other, Resources, Expectations, Size of Market and Tastes, Other, Expectations, Income, Size of Market, Substitute/complement.
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This scenario was indeed confusing at first, but I don't think his daughter is being taught good economics at all. As we learned in STORES for the determinants of supply, demand isn't a factor in the shift in supply, so the introduction would be incorrect as it says increased demand caused an increase in supply for the books. The ambiguity of the question makes it difficult to answer: is the demand or the QUANTITY demanded? Also, the answer to the questions are incorrect. Since the question does not mention any increase or decrease in demand, just merely a statement of the statuses of the books' supply and demand at a given time and place, the price should not be changing.
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Like everyone above me said, changes in quantity supplied reflects the changes in price. It's quantity supplied, and NOT supply.
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You guys are all wrong. Remember there's a difference between demand and quanitity demanded. a change in quanitity demanded would change the price.
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Well, I'm pretty sure everyone agrees that the main thing wrong with the teacher's assignment is that he should be saying quantity demanded in order to change the price. Do sixth graders really need to understand the difference though? They can barely even grasp supply and demand in itself, and if you try to explain quantity demanded vs. demand no sixth grader will have a clue what you are talking about. In general, the activity is more of a gentle introduction into economics and its basic ideas even if his question is technically wrong.
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Yea MOND! Price is not a determinant of supply. This is just a typical example of confusion between supply and quantity supplied. Not much of an issue for students learning econ in 6th grade..
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Price is not a determinant of supply, and therefore, the quantity supplied changes the actual price of the book and its retail price. This is a mistake that is made in class all the time, and for a 6th grader to have to try and understand it, when I don't even understand it myself is crazy.
However I wonder, what is the publishing company for the Harry Potter books only sold a certain amount of copies. Obviously, because they have such a huge following, people will be able to pay crazy amount of money for these book, seeing how there is a limited supply. Sometimes I feel, that this is wrong. Books should be open to the public, and what is the point of writing if only an elitist group of people can read them. And when its a children's book this is just compounded. I think the Harry Potter books are already overpriced, and if a writer actually writes for the people and so they can read their works, they should as for a price ceiling to be put in place. This way, people of all backgrounds and all classes could read the novels that are "written for the people".
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This excerpt demonstrates some incorrect economic analysis.
When a Harry Potter book comes out and people want to read this book, stores will order more copies of the book – this line is fine.
The demand curve in this case is unchanging because there has been no change in a determinant of demand. This book is a new product, so it naturally has it's own demand curve.
Instead of a shift in demand, there will be an increase in the quantity demanded, a movement up the curve.
Also, companies will not increase the supply of these books in the marketplace in response, but rather they increase the quantity supplied to cope with the shortage from the high quantity demanded.
There is actually no shift of the supply curve (increase in supply) because demand is not a determinant of supply.
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Definitely, Professor Haab has gotten his economic concepts all mixed up!
It sounds a little awkward how "The increased supply has been made in response to an increased DEMAND for the book," when demand is not one of the determinant of supply in the first place. There must be some other reasons to the increased supply of Harry Potter books, and one of which I can suggest is the expectations of suppliers; it would be pretty reasonable for them to expect that there would be sufficient demand to buy off the supply, assuming that people are really craving for Harry Potter books.
Although a lot of people mentioned that there should be an increase in the quantity demanded for Harry Potter books, I don't actually think so; The excerpt did not mention the change in price of the product at all, which is the only factor that can change the quantity demanded.
It's pretty interesting how economic concepts can be applied to everything!;D
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