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grade level: 3-5, 6-8
curriculum standards:
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8
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posted on: December 8, 1997
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Key Economic Concepts:
During December 1997, The Washington Post published an article about the debut of the Princess Beanie Baby. A Beanie Baby retailer, interviewed by the Post, indicated there was strong demand for the new stuffed animal.
During December 1997, The Washington Post published an article about the debut of the Princess Beanie Baby. A Beanie Baby retailer, interviewed by the Post, indicated there was strong demand for the new stuffed animal.
"In just a week, Banner has received 110 or so bids. Here's how they break down: After the $600 topper, there's been "one bid at $500, one at $400, a bunch of $300s and a whole mess of $250s and $200s," Banner reports. The highest bids generally are coming into the Annapolis store, Banner said."
In the quote above, can you create a demand schedule for the princess Beanie Babies? (Use approximations.) What happens to the quantity demanded when the price is lower? At what price do you think the store owner would be able to sell most of his 100 Beanie Babies? $500 or $200? What do you think would happen if he tried to sell them at $5.00 each?
- Beanie Baby Sites: These sites allow the user to find Beanie Babies online.
- Get Collecting Toys
www.store.getcollectingtoys.com/ [1] - Beanie Best Buy
www.beaniebestbuy.com/ [2] - Beanie Baby Heaven
www.beaniebabyheaven.com/ [3] - Buy Sell Beanies
http://buysellbeanies.com/ [4]
- Get Collecting Toys
Visit the following sites:
Visit an online market for Beanie Babies.
Look at the 'buy' and 'sell' prices at "Buy Sell Beanies [4] ."
Discuss the following questions with your students:
1. Why are the 'sell' prices higher than the 'buy' prices?
2. What happens to the difference?
3. Do you think that it's fair for the Collectible Exchange to pay lower prices for Beanie Babies and to sell them at higher prices?
4. Do you think that the Collectible Exchange would have started this service if they could not sell goods at higher prices than what they paid?
5. This company is engaging in a form of arbitrage. Can you list other markets in which arbitrage is practiced?
Links Used:
1. ^ ^ "GetCollectingToys.com" - (www.store.getcollectingtoys.com) This site provides information on toy collecting.
2. ^ ^ "BeanieBestBuy.com" - (www.beaniebestbuy.com) This site allows users to purchase Beanie Babies online.
3. ^ ^ "Beanie Baby Heaven" - (www.beaniebabyheaven.com) This site allows users to find Beanie Babies online.
4. ^ ^ "BuySellBeanies.com" - (buysellbeanies.com) On this site one can sell and buy Beanie Babies, as well as look at prices that Beanie Babies are going for.
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