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 resourcesname 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 US cents per
poundJune 2012 16.30July 2013 29.50March 2014 23.77
COCOA used to make certain cookies US dollars
per tonNovember 2012 $1,967.31August 2013 $3,064.33March 2014 $2,359.11
NATURAL GAS used to heat ovens
US dollars per 1000 cubic meters
June 2012 $172.85November 2013 $115.20March 2014 $72.00