Frozen North economics: Where supply, demand and distribution are important problems


Especially you economics teachers, look at this very carefully:

Six cans of juice, at a store on Baffin Island - photo from Tales from the Arctic

Six cans of juice, at a store on Baffin Island - photo from Tales from the Arctic

How much do you pay for juice at your local market?

“The High Cost of Northern Living” at Arctic Economics points to Tales from the Arctic and “Believe me now?”

How much per ounce?

Kennie (at Tales from the Arctic) features a bunch of unbelievable prices.  Getting goods to towns in the far north of North America, in Canada and Alaska, is a major production.  Transportation and handling kick prices up a bit.

We’ll find out how alert Sarah Palin is when somebody asks her the price of a gallon of milk . . .

More seriously, economics teachers might find some object lessons in these photos, and a good presentation on supply and demand, and the costs of distribution.

Milk at $8.50 a gallon? Even in Canadian currency, that burns.

I wonder:  Do prices like these make economics any easier to teach to high school kids?  Does the urgency of high prices make the subject more relevant?

Tip of the frozen scrub brush to Arctic Economics, of course.

6 Responses to Frozen North economics: Where supply, demand and distribution are important problems

  1. […] From a 2008 post at Millard Fillmore’s Bathtub.  Used by permission. GA_googleAddAttr("AdOpt", "1");

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  2. […] “Frozen north economics:  Where supply, demand and distribution are serious problems” […]

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  3. Onkel Bob says:

    KC, I don’t believe Ed is referring to using these data in an Alaska (or northern Canada where the data were collected) setting, rather discussing it in the lower 48. It is an interesting concept for geographers, how far did your food travel? E.g., Citrus was restricted to very small geographic area, reserved for an elite consumer able to afford it, and generally quite rare until the advent of railroad freight. Now, we (lower 48 again) get foods that are out of season from South America and Australia. Sure it’s of inferior quality, nevertheless, it sells enough to warrant such action. Place, region, adjacency, connection, between-ness are important concepts that can be mined here.
    I notice that the products pictured on the original site are all “value added” products. I would be more interested in seeing the prices of more raw materials – 50 lb sack of flour, sugar, or cornmeal. If you read the original entry, the place is only reached by sea. It would be interesting to compare Nunavut to island communities.
    Here in California, we have “the east side” the other side of the Sierra Nevada range. Prices there are much higher and reflect the geographic factors. Low population means low demand, limited access, there are few roads – let alone highways crossing the Sierra, limited local production. All these concepts could be introduced in a high school class. The concept of subsistence is alien to the urban population, but I remember well childhood on the farm where I gathered blueberries for freezing and drying and use over the winter.
    As for the dissembler GTP, any chance you can stay on topic? We readers are well aware of your opinions. Your inability and unwillingness to discuss the topic at hand describe less a person of education and more a half-brained, single issue zealot with nothing to offer.

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  4. Ed Darrell says:

    So, GTP, you think those are monopolies that deliver those goods up there? Where’s your faith in free markets?

    We may need to expand the realm of Santayana’s Ghost walking: “Those who don’t know anything about economics are condemned to vote without reason, and complain about taxes when they don’t understand prices in a market economy.”

    That’s right: I’m saying educated people can vote for Obama without fear (which the polls show pretty much the case). One more reason for McCain’s unholy attacks on education? You decide.

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  5. KC says:

    Hi! I’m long time-reader. Used to live in UT, now in AK doing biology. To answer your question about whether price urgency makes it easier to teach economics, the answer is preeeetty much `No.` Theres so many things wrong with rural education in Alaska, and so many things going against it, that even in the big City (Fairbanks, where our food costs are “Only” 12% to 33% higher than the lower 48, And 78% more for energy/utilities) , the urgency hasn’t lead to an increase in economic enlightenment.

    It’s also worth nothing that a lot of these places, the Cash Economy is important for fuel and utilities, but when it comes to food, it’s still primarily a subsistence economy. It’s not entirely – and it’d be a mistake to assume it is, but especially in Alaska, subsistence is very important. Heck, it’s even important in places like Fairbanks, where personal use harvest (salmon) and the yearly moose and caribou hunt make up a chunk of many resident’s food. And this is the big city! So in the villages, when you see those high prices, you have to remember that many people don’t rely on those foods for a large portion of their dietary intake.

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  6. goodtimepolitics says:

    You posted:Getting goods to towns in the far north of North America, in Canada and Alaska, is a major production. Transportation and handling kick prices up a bit.

    And so I ask that you think about who will pay the taxes when Obama will raise taxes on companies? We will in the way of price increases and the price at the pump for a gallon of fuel. Yes Obama does not want off-shore drilling which over 70% of the American people does!

    A vote for the democrats is a vote of agreeing with higher prices for food and gas!

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