Linkages....

There's an interesting story about gasoline prices in today's issue of USA Today. It does a good job of explaining how prices can differ between stations in close proximity, and the choices that a station owner may want to make, but often will find outside of his or her control. As I said, the article is interesting, but here are two others from the same issue that you can use with your students to see whether they can make some connections -- simple ones, to be sure, but there to be grasped.

The first story speaks to the idea that many retailers are stocking their stores. They believe that people are planning "staycations" instead of vacations. This decision makes sense in light of the rising price of transportation (i.e., fuel). The link here is clear. Higher fuel prices should translate to more people staying at home. People consequently will want to make that "staycation" as comfortable as possible.

The second story takes another step. If people are staying at home, they may be doing more backyard barbeques. And that means a shift in demand for all the accoutrements thereof, from hot dogs and buns to charcoal. The connection is simple, but your students should be able to see and explain how one change in the economy trickles through and affects a number of other decisions, choices and, subsequently, other prices.

And the retailers choices may represent a risk if they guess wrong and the American consumer just moves blithely ahead with more elaborate vacation plans.

I look forward to your comments.