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We see in the chart that in developing countries arms are considered a normal good. This is apparent as the number of sales is at its lowest in 2007, 2008, and 2009 - the time period of the late financial crisis. Incomes decreased and therefore also government expenditure. So since the governments had a reduced budget, they were forced to purchase fewer arms. However, once the global economy started to recover from the crisis, incomes rose again. Thus, governments were able to spend more on arms again (which we see in 2010 and 2011). This is a good example of how income, a non-price determinant of demand, can influence the demand on a good. Another non-price determinant of demand is government policy. The article states that Saudi Arabia was the developing world's biggest arms buyer in 2011, with deliveries of $2.8 billion - an unusually high number. Therefore, there must have been a change in Saudi Arabia's government policy; otherwise they would not suddenly be buying more arms. So now we see how government policy influences demand on arms. 

Car owners in Beijing are facing a possible oncoming tax. This is the resort that the Chinese government has taken in an effort to fight the ever-worsening traffic in the city. By fighting the huge amounts of traffic in major cities, the government fights the pollution of air. It is estimated that in 2012, seven million cars will be on Beijing roads (a huge and sharp increase from the 4.7 million in 2010). Other than a tax, the government is hoping to add the restriction of only one car per resident, while non-Beijing residents are only allowed to purchase a car before buying an apartment and a parking permit. Car owners are already paying a 30,000 yuan (S$5,900) for each car they own, yet the Beijing government hopes to have tax incentives for cars with engine sizes of 1.6 litres or smaller.

Recently regarding the current change in the governments to attempt and reduce the gas emissions, the UK government has started taking action regarding the taxation of the cars. In order to try and promote the more green efficient cars and the hybrids that emit below 130g/km of CO2 will pay nzero on the first year road tax and for the cars that emit less that 100 g/km will also pay zero on road tax. Moreover, in order to discourage people from demanding less of the more heavy emitting CO2 cars such as big SUV the government will start taxing much more heavily those cars. They also will start changing the road tax, they will charge them according to their emissions. In conclusion the lower the emissions the cheaper the tax will be ultimately making the consumers shift their demand from the larger or higher CO2 emitting cars towards the more green and low CO2 emitting cars.

In an attempt to impede on music and film piracy, the Dutch government will implement a tax on smartphones, laptops, and mp3 players (among other devices) as of January 1st, 2013. The tax will be based on the storage capacity of devices, allowing anything from empty CD-ROMs to set-top boxes to be taxed. A maximum fixed levy of five Euros will be placed on devices, some only with a fixed levy of one or two Euros. Thus, the producers and consumers of smaller, less expensive devices will feel the effect of these fixed levies more than those of laptop and smartphone producers for example, as the fixed levies will be a larger proportion of the price for cheaper products. The tax revenues will be distributed among the affected industries. 

The government wants to implement a one dollar raise in taxes on cigarettes, in order to ward consumers off them. The government is doing so to warn how dangerous and harmful cigarettes are.They want to discourage children and teens from smoking. Another reason for the tax raise of $1.98 is to help pay the state's rising cots for health care for the poor. There was a $2.7 billion shortage in the Medicaid funding, which needs to be recovered through collecting taxes. As cigarettes are quite inelastic, people will continue to buy them even if the price increases, as they are an addictive good and cannot be put down easily. Substitutes would not be an option in this case, as there is a tax added on other tobacco products as well.

In my article, the Swiss government has decided to increase the tax on cigarette packs by 20 centimes ($0.20). The government has also given manufacturers 3 months to 'adjust' their prices, which also implies that firms are being given time to increase their production (positive relationship between supply and prices). In this case, consumers will not be effected by a price change, as cigarettes are an addictive good. Cigarettes also have a very inelastic demand curve. 

The Australian government needed, as many other governments do, more revenue. They decide to implement a carbon and mining levy tax. The carbon tax forces firms to pay 23 australian dollars per tonne of carbon dioxide, shifting supply to the left, as carbon dioxide produced forces tax on the firms as well as encouraging them to leave less of a carbon footprint.The mining levy tax, puts a direct ad valorem tax on firms who gathering iron and coal. These taxes have allowed for worker's taxes to be decreased, therefore shifting the tax burden from workers to firms that are enviromentally harming.

The article Chicago's cigarette tax could approach New York's (by Megan Hickey) focused on the possibility of Chicago increasing taxes on cigarettes. There are several underlying reasons for the proposal; one being a $298 million budget shortage, the other to increase awareness of smoking for health purposes. Chicago already has the second highest tax on cigarettes in the US, the average cost for a pack being $10.25, after New York at $12.50. The total combined tax amount is $5.67 which is made up of a federal tax of $1.01, Cook County tax of $2, Illinois tax of $1.98 and a government tax of $0.68. The possibility of increasing this tax would lead to less consumption of the product, less revenue for tobacco companies and more deadweight loss for consumers and producers. However the Chicagoan government believes that the health benefits gained from less tobacco consumption are far greater than that of cost. To continue this tax hike (continued increase in the tax of cigarettes) would continue the trend of declining tobacco consumption and could decrease the youth in smoking by 7.2%. Not only would the state receive health benefits but the government would be able to increase their revenue through this tax hike.

Coffee supply in Starbucks and other plantations is decreasing. The global supplies are becoming less due to shocks that are occurring because of climate change. Shocks include hurricanes, mudslides, erosions and variations in dry and rainy seasons. All of these events affect the crop yield negatively, as they reduce the production of coffee and cocoa. It is suspected that by 2050 it will be too hot to grow chocolate in the Ivory Coast and in Ghana, which are the main global producers. Not only Starbucks is affected by the climate changes but also wealthy and other independent farm plantations. Central American workers reported that they have already experienced changing rainfall patters and more severe pest infestations. The Arabica coffee bean, a specialty in Starbucks, is at great risk. Coffee is a necessity for some people and it would be a real issue if coffee disappears. Jim Hanna, the company's sustainability director, informed Guardian that the U.S. government should step in and try to reduce climate change. Gap, an American company, has already stepped in and is campaigning. There have already been 2 warnings in less than a month that coffee is at threat and therefore it is important to thing and look 10 to 20 years ahead.

Coffee, a product consumed by so many people, but starbucks is now seeing climate change as a big threat to their industry. As climate change intensifies and the world's temperature is slowly but surely increasing in certain regions, it is feared that by 2050 in Ghana and the Ivory Coast it will be to hot for coffee to grow. Specifically the Arabica coffe bean which is one of the most important beans in the industry. There is now a lot of pressure on the government to act quickly and efficiently on climate change before it is too late. However coffee harvesters an farmers are already seeing severe changes in climate such as hurricanes and resistant bugs all causing for less produce. 

As the coffee beans are becoming scarcer, the supply for coffee is decreasing. Not only the coffee supply is decreasing, but also the cocoa bean, meaning a substitute is also not an option for switching to. The price of coffee will increase and the quantity demanded will therefore decrease as well, as not everyone will be able and willing to buy coffee at the higher price. The equilibrium price will settle at a higher price, with less supply being produced. This will signal to the consumers to buy less coffee/ hot chocolate and signal to the producers to produce less. In other words, the consumer incentive is to consume less and the producer incentive is to produce less. The resources will be allocated differently, as fewer resources are allocated to the production. Coffee becomes scarcer. The marginal benefit decreases and the marginal cost will increase.

Half the Saudi population is under 25 years of age. this poses a great opportunity to expand the economy of Saudi Arabia, with the new idea that the young workforce brings with them. At the same time it poses a threat if the government does not accomplish the task of creating enough working spaces for the large group that will enter the labor force in the next 10 years.

Half the Saudi population is under 25 years of age. this poses a great opportunity to expand the economy of Saudi Arabia, with the new idea that the young workforce brings with them. At the same time it poses a threat if the government does not accomplish the task of creating enough working spaces for the large group that will enter the labor force in the next 10 years.

This article describes the effect of price ceilings on goods in Asia. Most countries in Asia have set caps to petrol prices and only seldom raised these. Commentators argue that if price of petrol does not rise with the price of the crude oil in the world, consumers in Asia (where the price for petrol is low) will use up so much that the price of petrol will increase too much and harm the economy rather than help it. In China foods have been monitored as well. Price have a ceiling and if this is to be raise the company must seek approval of the government. This is only a temporary answer to the problem of keeping prices low.

India is looking to expand the price controls they have on drugs. This would apply not only to generic medicines, but also to patented drugs. Drug companies fear this decision, as they feel that India is not protecting their intellectual property enough already. The secretary of India's Pharmaceuticals Department, Kalha, states that they need to make expensive drugs available/affordable to the poorer citizens. Bayer AG and India are in a patent conflict. India's patent authority required that the German company, Bayer, issues a license, which allows Indian generic- drug companies to sell a less expensive copy of Bayer's patented cancer drug, Nexavar. The reason for this order was due to the expensive prices of the drug and India's Intellectual Property Appellate Board are arguing the case and expecting a ruling very soon. With the price controls on the drugs, the poorer citizens would have a fairer chance and curing their sicknesses, as they would be able to afford the medication for it. So far India has 74 set prices on generic medicines but is wanting to increase this number to 348. This high amount of price control has not been seen since 1979! The Indian government believes that the prices of drugs shouldn't be driven by market forces but should be regulated instead. However, so far there are no formal regulations to the plan of the price controlling yet, as the government is still deciding of final opinions. By restricting the prices of drugs, foreign pharmaceutical companies might become upset. Tapan Ray, the director general of the Organization of Pharmaceutical Producers (internationally based) of India spoke: " any price control in that area will stifle [research and development] initiatives seriously, adversely affecting patients' interests in the long run". Novartis is a Swiss drug maker and it has been fighting for a patent on its cancer drug, Glivec, in India. In 2006 India rejected Novartis' patent application, and since then Novartis has been fighting

In 2009 the federal government in the USA decided to raise the cigarette tax from 69 cents to 1.01 dollars which applies to all tobacco products. The tax increase was originally issued to fund a child insurance program but the law was vetoed by president Bush although the tax increase on tobacco products remained. Previous tax increases in the cigarette tax reduced consumption by 4%, however these were lower increases and it is predicted by the Office of Smoking and Health Center that 1 million of the 45 million smokers will quit.

The article Catfish Farmers Fight Fish Glut and High Fee Prices centered on the left shift in demand for catfish. There has been a steady decline in the demand for catfish in the last decade, causing its demand curve to keep shifting left. Last year, the supply of catfish was low which in turn led to higher prices (due to its scarcity). These higher prices led people to substitute (determinant of demand) catfish with other goods such as inexpensive imports or similar species of fish. The catfish industry has not been able to recover. This year (2012) the supply of catfish has managed to surpass the demand. The high supply led to cheaper catfish costs this year, which in theory should have led to more demand, however people seem to be sticking with their substitutes despite the price change. The feed prices for catfish (feed being a factor of production) are at an all-time high which is causing farmers to suffer; with high costs of production and low prices, they are receiving little profit. With the whole industry suffering, the government has decided to purchase 10 million dollars' worth of catfish hoping to act as a positive determinant of demand (trying to shift the demand curve to the right). This has not had a great effect on the catfish industry and people are starting to question its value; whether people are willing to buy catfish. The declining of this industry has already led to many catfish ponds being replaced with new crops.

This article was about the decrease in demand for catfish due to substitution and a change in taste and preferences by consumers. This has caused the demand curve to shift to the left. Because it has shifted left, the price of catfish has decreased therefore signaling that catfish is not as scarce as it used to be and its value has decreased. How have consumer incentives been impacted by this? Because the price has decreased and the good has become less valuable, people would be more inclined to buy it due to the lowered price. How would producers be impacted by this? As demand has decreased the price has decreased, and the lower the price the lower the quantities of goods firms are willing to supply. Therefore the supply of catfish will decrease. This demand shift will have a negative effect on substitute markets as consumers may find the price of catfish cheaper which may lead them to switch from their product to catfish. Lastly, how will this impact resource allocation? As there is a decrease of demand, therefore a decrease in supply, less resources will be used for the catfish industry and invested in other more profitable markets.

The reason for why the Canadian government started to stockpile on maple syrup is because considering that the market for the maple syrup is very dependent on the weather and how much sap comes out of the maple trees they will stock pile and get more back- ups. The reason for this is that the Canadians are expanding their market into more regions having more than 70% of the maple syrup market and they are attempting to expand it so in order to keep the demand on maple syrup rising they will use their backups in case there isn't enough. They are making sure that there is always enough maple syrup for the market. They don't want to create a demand and then have a bad season leading to them not being able to supply. For example in 2008 when they started having failed harvests their supplies ran short which lead to the prices going up from 2.40 Canadian dollars to 4.00 which lead to several producers to be priced out of the market because of their inability to supply. Which is why they have reserve supplies of maple syrup so that they can always be able to supply the maple syrup market in case they have bad harvests one season.

The strategic maple syrup reserve signals that there is going to be less scarcity in the market for this product as they will always make sure that there is enough of this product being supplied. The producer to ration the maple syrup more, because if they supply too much of the maple syrup their reserve will start to decrease as they will not be making sure that some of it is directed towards the reserve. If the demand for the maple syrup would be very high they would allocate more of the maple syrup in their reserve stocks to the market however if they were to have a lowered demand they would allocate less of the maple syrup and keep it in their reserves.

The demand of Fertilisers in India will drop by a fifth resulting in a demand of 45 million tonnes in 2012/ 2013 worth of fertilisers. One reason for this sharp decline in fertilisers is the cut in government subsidies to the industry which is creating a large fiscal distress for the state. Through the cuts in subsidies prices for fertilisers have increased and demand has been reduced. Another factor in the reduction of demand for fertilisers is the lack of rain meaning that investing in fertilisers is very risky for farmers in case it doesn't rain.

The demand on the curve would decrease, therefore the price would decrease and the scarcity would decrease because there would be more supply in comparison to the desires. Although there is a price decrease consumers would not raiton this good because it is mainly used by producers that need it, the farmers, who reduced their supply of food due to decreased subsidies and draught. Also, suppliers of the fertilisier would produce less because the profits gained from supplying fertilisers is reduced. Allocations to this resource would also decrease because suppliers produce less and might move their production to another good.

This article is acquainting us with China's plan to increase its supply of meat. Today, consumers in China are eating ten percent more meat than they did five years ago, so demand is increasing. However, the supply is lagging behind. Thus, Chinese officials have decided to buy millions of U.S. livestock and import it into China. This is a good example of how government intervention affects supply. By importing the U.S. livestock the cost of producing meat in China will be much less, whereas the quality will be much higher. However, critics from the U.S. are skeptic of this ordeal, as the cost of meat production is rising in the U.S. So the livestock exports to China would be increasing supply in China but they might decrease supply in the U.S. and lead to a future loss of a key U.S. export. 

Evidently, the reason for China's attempt to increase its supply of meat, is that there is an increase in the demand of meat. This means that meat has become scarcer. From a consumer perspective, the incentive now is to ration the amount of meat that is being consumed. Another consumer incentive might be to switch the consumption of meat with the consumption of a substitute good such as fish. From a producer perspective, an incentive is to produce more because the price is higher now. Therefore a producer is able to make a greater profit from the production of meat. There will also be a greater allocation of resources into the production of meat, as it is a more lucrative business.

The government in the Philippines will impose a price ceiling on essential drug products that are overpriced. This was announced by the Department of Health (DOH). Health Secretary Francisco Duque III said that the President is to sign an order that covers the lowering of prices on six or seven drugs. The firms refused to cut the prices in half, but the DOH recommended for price reduction. Overall, the prices were cut by about 30 to 35 percent.

The government wants to increase the taxing on alcohol in New York to make New Yorker's drink less and get them healthier. The Government's Health Department is agreeing that with the new tax increase on alcohol is would help New Yorker's get healthier by increasing taxes for example beer would be taxed 17 cents more and a bottle of hard liquor to 50 cents. New Yorkers original 7.4 cents of taxes on a bottle of beer, 36.9 cents on a bottle of wine and $3.61 on a standard 750-ml bottle of hard liquor.New York has counted 1,700 alcohol-related deaths in 2008 and the Health Department wants to reduce high drinking deaths by 16% and hospitalized alcohol accidents by 19% by the year 2012.