“The starting point for European expansion had nothing to do with religion or capitalism—but it had quite a great deal to do with pepper.” —Henry Hobson, Seeds of Change: Five Plants That Transformed Mankind L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Why were spices so important? What do you know about spices in history? – Columbus was seeking the ‘spice islands.’ – Portugal, Spain, and Italy all wanted spices. – They were used to flavor foods. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Black Pepper Black pepper comes from the berry clusters called peppercorns that form on the pepper plant. Black pepper is one of the most popular spices in the world. Records show black pepper being traded from south Asia dating back to 4000 years. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Cinnamon Cinnamon has a long history both as a spice and as a medicine. It is the brown bark of the cinnamon tree, which is available in its dried tubular form or as ground powder. Chinese and Ceylon cinnamon are the most common varieties. Cinnamon is a perfect spice to use during the winter months. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Cloves Cloves are small nail-shaped flower buds that are dried. Sweet, somewhat penetrating flavor. Cloves can be bought whole or ground. Ground cloves are commonly used in baking. Cloves are native to Indonesia and are harvested mainly in Indonesia, Sri Lanka, and India. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Market in Cinnamon Market: Anytime buyers and sellers meet to exchange goods/services Market Demand: Amount of a good consumers desire at different prices – The higher the price of a good, the less of it consumers want. – The lower the price of a good, the more of it consumers want. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Changes in Demand A change in market demand for cinnamon occurs when consumers are willing to buy more (or less) cinnamon at all prices. Several factors can shift market demand: – Consumer tastes: As we saw with the cinnamon market, if consumers’ desire for a product increases, so will demand. If desire decreases, so too does demand. – Number of consumers: The more buyers in a market, the higher the demand. If buyers leave a market, demand decreases. – Consumer income: As consumers earn more (overall), then they tend to spend more, increasing demand. If consumer income decreases, demand decreases as well. FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ?

Market in Cinnamon Market Supply: Amount of a good sellers want to provide at different prices – The higher the price of a good, the more of it sellers want to provide. – The lower the price of a good, the less of it sellers want to provide. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Changes in Supply A change in market supply of cinnamon occurs when sellers are willing to sell more (or less) cinnamon at all prices. Several factors can shift market supply: – Number of producers: The more cinnamon suppliers, the greater the market supply of cinnamon. Fewer suppliers means less market supply of cinnamon. – Cost of resources: If costs increase, less cinnamon can be supplied and market supply decreases. On the other hand, if these costs decrease, then market supply will increase. – Changes in technology: Improved technology (the tools, machines, etc. needed to produce cinnamon) can mean an increase in market supply of cinnamon. – Natural events: Events that occur in nature such as floods, freezing weather, or hurricanes can disrupt supply. L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Determining the Market Price Scenario Affect Supply or Demand? Affect Price? 1. “Splinters of Paradise”Demand 2. Improvements in sailing technologySupply 3. Nutmeg and cloves were thought to cure disease Demand 4. Dutch East India Company took over the Spice Islands Supply 5. Spices were a luxury goodDemand 6. Traders told outlandish storiesSupply 7. Tobacco, coffee, sugar, and tea became the new status symbols Demand L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Demand Schedule for Cinnamon (1439) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Demand for Cinnamon (1439) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Supply Schedule for Cinnamon (1439) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Supply of Cinnamon (1439) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Demand Schedule for Cinnamon (1440) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Demand for Cinnamon (1440) L ESSON 19 – W HAT ’ S THE B IG D EAL A BOUT S PICES ? FOCUS MIDDLE SCHOOL WORLD HISTORY © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY