Calorie Labeling Research Paper

Economics Commentary Number: Practice

Title of Extract: Calorie Labeling Doesn’t Curb Fast Food Habits

Source of Extract: www.izzit.org

Date of Extract: Tue Oct 6, 2009

Word Count: 702

Date: 10/28/09

Sections Syllabus to which the commentary relates: Section 2.2

Candidate name:

Candidate number:

According to the mayor of New York, Michael Bloomberg, Americans has the right to eat what ever they want. It is because of this attitude that makes America one of the leading countries in adult obesity. A current study was conducted by New York University and Yale University to see if by increasing the print of nutrition facts and posting them on the menus at fast food venues would affect the amount of fast food consumed.
Income elasticity of demand measures the degree to which consumers respond to a change in their income by buying more or less of a particular good. In the case, the study focused on neighborhoods where income was decreasing. Even though the money people had was scarce, or having an inadequate supply of money, the people were interestingly enough buying more McDonalds than before. Many researchers teamed had up and came to a consensus that people rely more and more on inferior goods, or those good of lesser quality and generally less expensive, that normal or superior goods, which are goods that have a better quality and tend to have a higher price tag than the inferior goods. This reaction is due to the consumers’ spending limits where they can only spend a certain amount of money. The main component of spending limits is income. When a person’s income is high, that person has a large spending limit because there is flexibility and extra money to spend. To the contrary, when someone has a low income their spending limits unfortunately reduces in size, of course depending on how much of a difference there is in the incomes of the people being compared. With this being said, all of the households included in this study are in the lower class which therefore means they have a small spending limit and they have become quite reliable on
The Price Expected and the Quantity Expected are represented with dotted lines. The Price Expected values for both Pe and Pe1 did not show any changes in value. However, the Quantity Expected valued did change. The initial Demand line, labeled as D on the graph, increased of shifted to the right on the graph to the value where the final Demand Line is located, represented as D1.It is due to the rightward shift of the Demand Lines that the Quantity Expected values also moved to the right or increased. The Price Expected values did not move because price is not a factor in this scenario. The only factor that is being affected here is the amount of fast food being purchased, otherwise represented as Quantity Expected and Quantity Expected 1. This change is relevant in the graph because the number of fast food increased as the amount of the people’s incomes diminished. This is once more due to their reliability on inferior goods because they cannot afford the more expensive, normal goods. So, as their income decreased they stopped buying normal goods and began purchasing more inferior goods which as a result caused the Demand Line for fast food to shift to the right creating an increase in Quantity Expected and