Cookie Economics
A visit to Dr. Lucy’s cookie factory
Learn about…
• How an order for cookies (demand) leads to
making just the right amount (supply).
• How different types of resources are needed
to make a product and operate a business.
• How cost, price, and profit work.
• How supply and demand lead to scarcity or
surplus.
Sales order
How many cookies
must be made?
• Dr. Lucy’s has an order for 1,280 packs of
cookies (demand). There are 4 cookies
in each pack.
• How many cookies must be made (supply)?
How many cookies on a tray?
• How many cookies are in each row on a cookie tray?
• How many rows are on a tray?
• So, how many cookies are on each tray?
How many cookies on a rack?
• How many trays fit on a rack?
• How many cookies are on a tray?
• How many cookies are on a rack?
• Do we need to make 2 or 3 racks
to fill an order for 5,120 cookies?
How many shipping boxes must be sent?
•
•
•
•
16 cookie packs go in each shipping box.
40 shipping boxes go on each shipping pallet.
How many cookie packs go on each pallet?
How many pallets do we need to send for our order of 1,280
cookie packs?
Invoice
Resources, cost, profit
Fill in examples (see next page)
cost
Human Resources
$0.18
Natural Resources
$0.20
Capital Resources
$0.14
total cost to make a cookie pack
$0.52
price per pack to the store
$0.70
WHAT IS THE PROFIT FOR A COOKIE PACK?
3 types of resources
name each type
•
•
•
Human Resources
Natural Resources
Capital Resources
Scarcity and Surplus
• Supply and Demand
• Cost is related to supply and
demand
• Scarcity
• Scarcity is when there is more
demand and less supply
• Cost goes up when a resource
is scarce
• Surplus
• Surplus is when there is more
supply and less demand
• Cost goes down when a
resource is available in surplus
• When were these cookie
resources scarce?
SUGAR
used in all cookies
June 2012
July 2013
March 2014
COCOA
used to make
certain cookies
November 2012
August 2013
March 2014
NATURAL GAS
used to heat ovens
June 2012
November 2013
March 2014
US cents per
pound
16.30
29.50
23.77
US dollars
per ton
$1,967.31
$3,064.33
$2,359.11
US dollars per
1000 cubic
meters
$172.85
$115.20
$72.00