Welcome this summer series of snippets of ideas for Cupcake Economics.

For the first discussion, I’d like to focus on the book Hello Cupcake, by Karen Tack and Alan Richardson. Rather than fiction, I have chosen this non-fiction recipe book to begin. You can find many interesting cupcake ideas on the Hello Cupcake website.

Cupcakes are great to eat, Yum, but they are also great beginnings to use to talk about economics concepts. For example:

1. What are the productive resources needed to make cupcakes? Let’s start with ingredients. Pinky Pie (from My Little Pony) can help us with some of these in this delightful little video: Pinky-Pie’s Cupcake Song. Ingredients can be considered intermediate goods in creating the final cupcake good. What intermediate goods are mentioned in the song? What intermediate goods are mentioned in your favorite cupcake recipe?
2. Now think of those ingredients. What are the natural resources necessary to create those goods? For example, where does flour come from? How do we get sugar? Where do we get vanilla? Or chocolate? These are all questions that can lead to the natural resources.
3. Now think of the capital resources necessary to make those cupcakes. What tools and equipment do you use when baking. Pinky Pie can show you a few things–bowls, mixers, wooden spoons–but what other capital resources can you think of?
4. Now comes the human resources or human capital. What human resources are necessary to make cupcakes? This is different in your home than in a factory. For example, watch this series of Khan Academy Cupcake Economics videos to understand the complex economics of creating cupcakes in a factory:

• Economics of  a Cupcake Factory
• Cupcake Economics 2: More Analysis of the Cupcake Business
• Cupcake Economics 3 : Using our spreadsheet to show why prices decrease when utilization is low and prices