The Demand for Coffee

       Demand in economics is defined as the desire to purchase, along with the ability to do so. The demand for coffee is usually determined by its price and availability of substitute drinks and consumer's tastes. When coffee prices rise, people do not reduce their coffee consumption proportionately and when the prices fall, consumers demand for coffee don't neccessarily increase that much. However, when coffee prices show a huge increase, the consumers tend to reduce their consumption proportionately. In 1976-1977, in the US, there was a huge cutback for coffee consumption, but recent studies show that the long-term decline for coffee has more to do with consumers tastes and preference as opposed to the price. Some people even say that the changing lifestyle of society has allowed soft drinks to compete with coffee as a social drink.
 
       The demand for coffee in china will most likely increase, since studies show that the coffee demand rises as literacy rate in a country grows. There is a huge correlation between the two, and since China is becoming more educated and literate, this is leading to a higher demand for coffee. Experts say that coffee prices will rise due to the decline production in Brazil and Colombia, since dry weather hurts harvests. These countries are two of the worlds largest coffee bean exporters. Starbucks says that the rising coffee prices will most likely decrease the price of milk, which has to do with the price of related goods.  Although China's demand for coffee will increase in the long-run, in the short- run, coffee demand is unlikely to rise because it is still very expensive and people are starting to prefer other more affordable drinks.

Dry coffee harvests in Brazil


Starbuck coffee in China

Opportunity Cost; Gas Cars vs Electic Cars

Opportunity cost is defined as the benefit that could have been gained from an alternative use of the same resource. There are many things in the world that can display this. I chose to talk about cars that use gas to run, versus cars that use electricity to run.  Gas powered engines are only 20 % efficient, the remaining 80 % from gasoline cars is lost to heat. Gas cars have a high opportunity cost since gasoline is very expensive nowadays and the price is only getting higher, due to scarcity and the fact that gas is a limited resource. Many people drive cars with larger engines and people live further from their work because they have easy access to transportation. This causes them to refill their gas tanks more often. All this gas coming out of car exhausts creates pollution in the environment which adds to global warming. Another resource of transportation is the electric car. Electric cars have the same features as gas cars do; speed, air conditioning, navigation systems, abs brakes, cruise control and airbags. Electric cars now use lithium-ion batteries which are eco-friendly, meaning they are not considered toxic waste and can be recycled. They are smaller, lighter, last longer and have a better recharge capability. Due to the fact that they are eco friendly and only need to be plugged into an outlet to be recharged, they have a low opportunity cost since they benefit the environment in the long run and avoid people refilling their gas tanks. This is how electric cars have a higher benefit than gasoline cars.

 Hydrocarbons + nitrogen oxides + carbon dioxide+ carbon monoxide coming out of a gas car's exhaust
 
 Inside an electric car