Hey there! Sign in to join this conversationNew here? Join for free
Turn on thread page Beta
    • Thread Starter
    Offline

    2
    ReputationRep:
    I thought I had finally got the answer to this question, but now ive managed to confuse myself.

    Could someone help me with this microeconomics question:

    Which would you expect to flucutate more over time: the price of gold or the price of eggs? Why?

    Thanx

    Please reply quickly as its urgent - may mean I have to change all my work!
    Offline

    0
    ReputationRep:
    I would say the price of eggs, because it depends more on production from the hens which is unpredictable, whereas if you find a stock of gold it is down to the extraction rate, which can be predicted.
    Offline

    15
    ReputationRep:
    Well i think both sides of the argument can... well, be argued.
    Are we talking as a proportion of their total value?
    • Thread Starter
    Offline

    2
    ReputationRep:
    i know this question is very vague - and we were told that we dont really need to do much research into the price or gold or eggs

    so does that mean you just argue from a theoretical stand point

    the annonying thing is that gold is both a luxury and a form of investment - this is why you hear of gold prices rising and such. but if i was to look at this theoretically i could ignore its investment quality and say yeah its a luxury and is demand price elastic which means that prices wont fluctuate as much because its would cause huge effects on demand

    i think tho that the actual answer you give prob doesnt matter as long as you give evidence to support it

    in summary my arguement for eggs is:

    The large fluctuation in the price of eggs is caused by two main factors - inelastic demand and supply fluctuations. Eggs have an inelastic demand because they are considered necessities, there are no close substitutes and they account for a relatively small proportion of consumer’s incomes.

    Seasonal changes in the prices of eggs are usually a reflection of variations in production. In temperate climates, the natural laying season is during the spring. Prices tend to be low during spring because of the plentiful supply and much higher in autumn when eggs are scarcer. In addition, variations in the availability of feed often cause fluctuations in marketing supplies of eggs

    does that sound correct or am i completely off track cause my friends are saying its gold?? :confused:
    Offline

    0
    ReputationRep:
    No I think you are right with the eggs actually (based upon my thoughts not really evidence) But I do think it will be more about a structured reasoning, rather than the answer you give, it's very much a which came first chicken or the egg question. If you want to give the "correct" answer look into the history of it's pricing, and look at the fluctuations. I never really have looked at how gold prices change, but when I worked in the petrol station, I know the price of eggs would alter (up and down) weekly.
    Offline

    3
    ReputationRep:
    (Original post by Falguni)
    I thought I had finally got the answer to this question, but now ive managed to confuse myself.

    Could someone help me with this microeconomics question:

    Which would you expect to flucutate more over time: the price of gold or the price of eggs? Why?

    Thanx

    Please reply quickly as its urgent - may mean I have to change all my work!
    I'd expect the price of gold to fluctuate more. We can predict the demand for eggs and poultry farmers keep enough hens to ensure that demand is met but not exceeded.

    The predictability of demand and the ease with which that demand can be met will go a long way to stabilizing egg prices.

    With gold, it's not as easy to predict demand (it can fall out of fashion - silver or diamonds might be preferred) and we certainly can't predict supply. No-one knows how much gold resourses there remain and how difficult it is to extract it. And of course governments are know to dump gold on the world market (Britain dumped several hundred tons of it recently) and so bring the price tumbling down.
 
 
 
Poll
“Yanny” or “Laurel”
Useful resources

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Write a reply...
Reply
Hide
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.