• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics commentary

Extracts from this document...

Introduction

Economics Commentary - Rising food prices The rising food prices around the world are causing crises everywhere. Consumers are facing this because of the conditions of demand and conditions of supply are changing. Conditions of demand are when you consider the factors that cause an increase or a decrease in demand for a good or service. Conditions of supply are when a shift of the supply curve occurs when the price does not change but another variable does. This rise can be illustrated by the factors of price; signaling device- a rise in popularity of one good, increases demand will then outstrip supply at the current price - a shortage will exist and the price will rise. The rise in price acts as a signal for producers to put more factors of production into making food. ...read more.

Middle

so they can cover their cost. Since supply has decreased then there is an extension in demand. This would make the price increase and quantity demand would decrease. But overall from (Q1,P1) to (Q2,P2) price has increased and quantity demand has increased a bit. The article states that if the poor countries speed up investing on agriculture and more farmers come in the market, then they "will grow more grain for both fuel and food, and eventually bring prices down. This is an example of price acting as a signaling device for resource allocation. This is a long term solution that can take place. What is happening here is that farmers join the industry and so supply increases. There is an extension on the demand curve. ...read more.

Conclusion

This will hit hard on the poor countries like Tanzania. The article states "Tanzania are likely to be gripped with severe hunger crises" this shows that the government will have to do something for the country. The best way that they can do this is invest on agriculture and so farmers can bring down the food prices by producing more locally. This has been started in the developed counties as they have planted wheat; this is a long term strategy. But still consumers will "face at least 10 years of more expensive good", so the earlier the government can intervene, the less years of expensive food. The UN is facing a $500 million shortage in funding to feed 89 million people. Word Count: 749 ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Macro Economics Notes

    Does the government investment not stifle private investment (crowding out) by taking away scarce resources of land, labour e.t.c Phillips Curve Inflation LR Phillips curve Q = Natural rate of unemployment NAIRU Q Unemployment Quantity theory of money Worksheet Functions of money Worksheet - functions and uses of money Running

  2. Why did the UK did not join the EC until 1973

    Young et al., 2004:321) which of course was not compatible with its application for membership to the EEC, hence de Gaulle's veto of Britain's application in January 1963. Despite the first veto, Britain reapplied for membership in 1967. By then, Harold Wilson - whom belonged to the Labour Party

  1. The Economics of Housing. Factors affecting prices and demand.

    It same increase in all the year till 2008 then there is a slight decrease of prices. House prices fall by4.3% in the 2nd quarter of 2008. Annually the house price fall by7.3%in London and 6.1%in all UK. IDENTIFICATION OF BACKGROUND FACTORS: A House price in UK changes in different reasons.

  2. Markets and Price Determination

    a higher price of p3 with a lower level of sales q3. Possible causes of a decrease in demand include: * Decrease in consumer income for a normal good. * Increase in consumer income for an inferior good. * Decrease in the price of a substitute good.

  1. The structure of the EU budget and its allocation

    In payments, the variation between initial appropriations and their actual implementation concerns principally: � Entrepreneurship and Innovation Programme, under-implementation of EUR 92 million. The financial crisis had a major effect on the disbursement profile of financial instruments, particularly those in the area of venture capital.

  2. Growth and Development Problem Set - IB Economics exam questions and answers.

    An externality can be either positive or negative. (Example: pollution emitted by a factory). Sustainable development focuses on four main objectives: (1) social progress, (2) effective protection of the environment, (3) prudent use of natural resources, (4) maintenance of high and stable levels of economic growth and employment.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work