7 ms·

>as the price of the staple rises, so demand for it goes up. in $ terms, sure, but only because the price went up. In absolute units? No.

aidenn0 6y ago
In absolute units it goes up. Simplest model: peasants get 90% of their calories from cheap grain, and the balance from expensive meat. The price of grain goes up, so now they can't afford meat and have to eat more grain to meet their caloric needs.
- bobwernstein 6y ago
  yup I see it now. Thanks for the explanation.
dghf 6y ago
Yes, in absolute units (according to the theory). If you buy exactly the same amount of kg of staple as before, you won't have enough money to buy the same amount of other food stuffs as before, so you'll be short of calories. Assuming you can't spend more money on food, your only options are to go without or to buy more of the staple (and even less of the other foodstuffs). Some made-up figures: * Staple costs $1/kg, and provides 1500 calories/kg * Other stuff costs $2/kg and provides 1000 calories/kg Out of every dollar in your food budget, you spend: * $0.50 on 0.5kg of staple for 750 calories * $0.50 on 0.25kg of other stuff for 250 calories for a total of 1000 calories for every dollar spent on food. Then the price of staple goes up to, say, $1.20/kg. If you stick to buying the same absolute amount of staple as before, your spending looks like this: * $0.60 on 0.5kg of staple for 750 calories * $0.40 on 0.2kg of other stuff for 200 calories. You're 50 calories short. You can get back up to 1000 calories per dollar by spending like this: * $0.67 on ~0.56kg of staple for 833 calories * $0.33 on ~0.17kg of other stuff for 167 calories That's an absolute increase in staple consumption from 0.5kg to 0.56kg for every dollar spent on food -- a bit more than an 11% rise.
- bobwernstein 6y ago
  you're right. thanks for the informative explanation.

aidenn0 6y ago

In absolute units it goes up. Simplest model: peasants get 90% of their calories from cheap grain, and the balance from expensive meat. The price of grain goes up, so now they can't afford meat and have to eat more grain to meet their caloric needs.

bobwernstein 6y ago
yup I see it now. Thanks for the explanation.

dghf 6y ago

Yes, in absolute units (according to the theory). If you buy exactly the same amount of kg of staple as before, you won't have enough money to buy the same amount of other food stuffs as before, so you'll be short of calories. Assuming you can't spend more money on food, your only options are to go without or to buy more of the staple (and even less of the other foodstuffs). Some made-up figures: * Staple costs $1/kg, and provides 1500 calories/kg * Other stuff costs $2/kg and provides 1000 calories/kg Out of every dollar in your food budget, you spend: * $0.50 on 0.5kg of staple for 750 calories * $0.50 on 0.25kg of other stuff for 250 calories for a total of 1000 calories for every dollar spent on food. Then the price of staple goes up to, say, $1.20/kg. If you stick to buying the same absolute amount of staple as before, your spending looks like this: * $0.60 on 0.5kg of staple for 750 calories * $0.40 on 0.2kg of other stuff for 200 calories. You're 50 calories short. You can get back up to 1000 calories per dollar by spending like this: * $0.67 on ~0.56kg of staple for 833 calories * $0.33 on ~0.17kg of other stuff for 167 calories That's an absolute increase in staple consumption from 0.5kg to 0.56kg for every dollar spent on food -- a bit more than an 11% rise.

bobwernstein 6y ago
you're right. thanks for the informative explanation.