Group items tagged

By setting a price floor, maize prices will increase so that the good is more valued and this will lead to less wasting and more available supply in the long-run.

Government is investing in infrastructure to reduce the maize thefts and this is an example of supply-side policy.  A diagram can be made here.

This will also lower prices and may stop the rise of maize costs as less wastage will occur.

Perhaps, increasing the maize prices will make up for the loss in revenue from the stolen maize.

This is my ECON IA for MICRO

I can use these numbers on my diagram. 240GBP was the original equilibrium price, 388GBP the new equilibrium.

Again, I can use these figures in my diagram on the Quantity axis.

This explains the shift in demand

As does this.

This partly explains the shift in supply

I can bring in here the concept of substitute goods - that German etc rape crops are a substitute good. That their fall in supply will have lead to an increase in the price for them, leading to a fall in demand. This will have lead to an increase in demand for UK rape crops. Could show this diagrammatically if needed.

Again, this explains the surge in demand. It has a number of different uses. (Called composite demand).

We could start to use this as some kind of evaluation - the fact that there might not have been a shift in supply at all.

So, overall, I could write a commentary about how a small shift in supply and a large shift in demand has led to an increase in the price for rape seed. I can easily show this with a diagram and explain the factors behind each movement. I would need to show the shift in supply being less than the shift in demand. For evaluation I could start to look at the impacts of PED and PES. Might they be inelastic or elastic and how might this impact the price mechanism. I could also speculate a little about what might happen in the future, based on the information in the article, and its impact on the price of rape seed in the UK

complementary goods. 

weak Won makes Korean car prices relatively cheaper than strong yen japanese cars

Draw S-D curves and talk about substitute goods 

Decrease in price due to decrease in demand

Substitute goods present, so has a higher PED. has lower demand compared to vegetable oil

Showing that further un decided taxes are also going to be implemented.

This shows the reasoning for the change in taxation. However it does not actually show that this will impact the demand of alternative products.

Showing that these taxes may spread into other economies.

Tax credit, a form of subsidy, keeps the price low and companies profitable. 

Possible evaluations 1) why government wants to keep one type of subsidy while getting rid of the another type? 2) pros and cons of keeping this subsidy 

Possible evaluations 1)pros and cons of having subsidies for ethanol 2)was the subsidy effective 3) why did the government implement this in the first place 4) what could the government have used other than tax credit

movement on the demand function

loss = bad 

increase in unemployment

decrease in demand

substitute goods