ZIS IB Year 2 2013-14

Tis is an example for an demand article because it shows that the scarcity of diamonds if driving the prices up. In the last couple of years experts have seen a constant rise in the price for diamonds. This is because of the number of potential buyers has risen because coutries like China, India and russia are economily growing and creating more wealth. The interest is growing and the scartcity aswell. A lot of old diamond mines are running out and one is not sure if there are a lot more around the world.

The demand for iPhones is greatly increasing in China. In Apple's fiscal year of 2011, they were able to sell 72 million iPhones, a number that soon might almost be sold in China alone. Currently, 10 million iPhones are sold in China, but this is because China's lead mobile carrier; China Mobile, has a network that is not compatible with the iPhone 4s. However, this year China Mobile is flipping to their knew network; the 4G which is compatible with the iPhone 5. This will open up a new market for Apple, as now, millions Chinese will be able to effectively use the iPhone 5 with China Mobile's network. Therefore, the demand for the iPhones will greatly increase due to the 'new' market.

Apple sold 72 million iPhones in 2011 to more than 100 countries. It is said that Apple will sell 57 million more iPhones per year in China since the demand is increasing. There are currently 650 million people who are branched to China Mobile which does not carry the iPhone network which includes 100 million who have found ways to use the iPhone through the network. Next year, China Mobile will change to the 4G network which will allow those additional 500 million people to get the iPhone.

Mini Analysis: 150 words- connecting article to concepts learned in class. For almost ¼ of the world's population, the demand for water is greater than the supply available. Water is a necessity for everyone and a want for all. The prices of water are increasing, as water is becoming scarcer. For many countries such as Egypt, India, Pakistan, water is very rare and therefore has a higher price. In Switzerland for example, water is not as scarce and therefore our prices aren't as high. Although Switzerland may take water for granted, the prices are still rising, as water is running out all over the world. Primary economies are running into issues, as they are not able to harvest and produce as many crops as they were in previous years. The main problem is that there is no substitution product for water. Other drinks such as tea, sodas etc. don't count for water.

Stay in school.  There's long life and money in it.

This is a demand article, because it talks about how the demand of Gas seems to not go up that much, or drop. Yet the Price of oil seems to rise a lot.

The consumer incentives have changed and have increased the demand to now be much higher than previously. What this does to the producer incentives is that it makes then want to supply more because they will both make more money for each unit and be selling more at a faster rate. The new resource allocation that would take place from this event would be that previously allocated resources for other things are now being moved towards agriculture and food producing industries. For example if cows were previously being bred due to their high price, because the demand has increased the producers may now be willing to buy these cows for dairy products or milk.

Weather disruptions and rising energy expenses have increased grain costs at record high. Current supplies may be ample to start unrest caused by the high food prices. With droughts in the Soviet Union and weak monsoon rains in India, corn and soybean prices last month exceeded records. It is said that U.S consumers might need to pay 3 to 4 percent more on food next year because of the effect droughts have on store shelves. Places such as the middle east and North Sub-Saharan Africa are at a great risk since most of their products are imported. Because of this supply shock, there is a negative shift along the supply line as supplies are becoming more expensive. With the addition of governmental intervention such as taxes, firms will have a much lower profit this year on grain supplies.Also there will be less products for the firms to sell. Not only does this affect firms but as stated before, the world should be ready for a food price increase in the coming year.

Becuase of weather changes, there is a scarcity issue in the amount of food that his growing around the world. In economic terms, this means that the supply curve has shifted to the left created a new Equilibrium point. Because of this, the price has increased as the good is more scarce and of course, the supply has decreased. This means that the demand for the good has decreased and consumers have to ration their food even more. Because of this change in supply, there are less resources on the market so because of this scarcity issue, the prices have to go up so that producers get some sort of income. Unfortunately, this means that the consumers have little or no marginal benefit as the price increases. The demand for the good is still high as everyone wants to be able to buy good but unfortunately the price is too high and consumers are not able to buy the product. The marginal benefit decreases for both the consumer and the producer.

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. 

The article Supply, Not Demand, to Blame for Pullback in May Home Sales addressed the issue of a lack of supply being the cause for the recent decline in house sales. In May, 1.5% of sales had fallen and the decline of properties is usually associated with the lack of demand. However recently, demand has been exceeding supply. A lack of supply leads to a left shift of a supply curve (price of houses and supply of properties) as there is a decrease in supply. The determinant of this shift is caused by productivity. Productivity is the input vs. the output; firms wish to minimize input to gain the greatest output. In this case, productivity has decreased as the input is not being met to meet the maximum output therefore leading to a lack of supply. It also relates to the basic economic problem of scarcity and that the resource (houses) is scarcer than before which affects the production therefor the supply of the good. However economists predict an increase in the supply of goods, despite these recent developments. Perhaps this lack of supply, this left shift of the supply curve was caused by a supply shock.

Sony cutting jobs in some departments and moving headquarters should mean that they achieve their goal of becoming efficient in the mobile market. In a diagram, the supply curve would shift to the right. This would lower prices, and give more customers incentive to buy their phones. Their phones should be less scarce, and therefore signal to producers to limit supplies. Sony is trying to win over market share on Apple and Windows, which should occur if they are selling more phones.

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.

After the United States supported Israel in the "Yom Kippur" war, the Arab members of OPEC (Organization of Petrol Exporting Countries) announced an oil embargo with the US, where they would charge 70% more. In 1973, at the time of this restriction of oil, the OPEC was globally known as a large oil producer. This caused a shortage of oil, thus shifting the "supply curve" to the left, while the demand curve stayed constant. With this low supply, and constant demand, oil became a scarce good. In order to reach market clearance, or equilibrium, prices increased drastically. From $3 per barrel in 1971, to almost $40 per barrel in 1980. The shift in oil supply resulted in an increase in transportation costs. In order to compensate for the high oil prices, the Government of the United States increased domestic prices, thus increasing inflation. This inflation eventually led to relatively lower oil prices.

Gold Demand falls (16. Aug 2012)

This article shows the fact that the demand for gold dropped. The global demand fell by 7 pc within three months up until the end of June. The World Gold Council stated that this is due to economies facing challenges as well as extremely high sales last year. The analysis also says that this is due to taxation on gold (mainly jewelry) in India. Luckily India is only one of many in the gold market, therefore It did not affect the demand too much. This relates to our discussion in class by addressing the fact of the demand curve moving to the left (the demand is decreasing). India's demand of gold may have dropped due to the new taxation has supply is limited.

In this article the company Norsk Hydro decided to change the raw material they produce for German rolling mills to 'increase in-house primary metal sourcing, replacing less cost-efficient remelting of cold metal as a source for its Neuss-Grevenbroich rolling mills.' This is supposed to optimize to the current issue in the market. The Neuss mill will increase production of aluminium to 150,000 tonnes per year unlike the last few year in which it only produced 50,000 tonnes. The factories have a maximum production limit of 230,000 tonnes. Although the tonnes created per year are now increased, it is still not exploiting the maximum point. This point may not be profitable due to limited demand in the market. Maybe the supply and new improvements including framework, CO2 compensation and more efficient smelters will increase the demand.

Although this article shifts supply to the right as there are technological advancements such as better smelters, there is also a movement along the supply curve as the company is getting closer to exploiting their maximum production point. In this case they state that supply is higher than demand. At the moment they have a surplus so the producer must decrease the price so that the quantity demanded will increase. The product, because of the surplus, is less valuable and as there is more quantity it is not as scarce as before. Related markets can buy the aluminum at lower price, increasing their benefit. The producer of aluminum must reduce resources allocated into production to return to the equilibrium point.

The price of maize has risen this year due to lower yields which will reduce this year's crops to less than what was originally expected.. The problem being created, is that this year's food price index of maize is above of what it has been at the same point during the years 2008 and 2011. Now it is feared that the same thing might happen to America's soya bean harvest, and with this it would have a huge impact on livestock farmers, which are already starting to have trouble with their harvests. The worry is now that, just like maize, the soya beans will become higher priced and with this less people would be able to afford it. But not only would it affect the soya beans, that would simply be the beginning; next would be the meat and then a wider food-price problem could be underway. Therefore, society is worried that this wave of pricing food higher than other years due to worst crops might not only affect the agricultural economy, but would expand into all of the food market, making less people be able to buy more food.

MUMBAI Aug 21 (Reuters) - Indian sugar futures fell nearly 2 percent on Tuesday on slow demand and additional supply of non-levy sugar, though a likely rise in demand next month because of religious festivals have limited the downside. Because of a few slow days in the sugar market, India's profit on sugar has decreased which means that sugar prices should drop in the coming days as the demand law states. Although a contributing factor, next month's festival, has limited the downside. With the demand decreased, there was a shift in the demand chart but because of future events which will occur, sugar prices will come back up in the coming days which means that the left shift which occurred these couple of days will pump back to the right because if this contributing factor. Because of this occasion the prices on sugar most likely will increase because of the higher demand of sugar during the Ganesh festival.

This article relates to the idea of demand because in the article it talks about the growing quantity demanded in the Coffee market. Since the Coffee market is expending so rapidly the price of the coffee is expected to increase rapidly. The larger the cofee market becomes the more the demand curve will shift, eventually the quantity demanded will decrease because the price does not seen worth it anymore for customers

Because the demand on coffee is increasing there is a threat that the product will have an increase of price soon because it will become very scarce. since the demand on the product is so high that the consumers have indicated that they want the coffee. Producers have an incentive to produce more coffee. If the producers are not able to keep the high amount of supply up than prices will rise and the supply line will shift to the left indicating that the price will increase and the scarcity has increased as well. Other markets may suffer as well from the increased of scarcity because the demand on complimentary goods will increase as well if the demand on coffee stays high.

Analysis- Shampoo Demand Article This article about the demand for Shampoo is connected to the class topics due to showing parts of what we have learnt during our sessions in the classroom. The main key word which we have learnt in class that is shown in this article is demand, as the title states. It is a bit less connected to opportunity cost and resources than it is to demand and supply, which are both exploited in chapter 2. The chosen article speaks of demand of Shampoo, and how smaller packets are more wanted in the past few months or weeks. This relates to the supply part of economics, due to the producers and sellers no longer selling larger packets of shampoo, but sticking to the one time use ones. Therefore, this article reflects on the key ideas of what we have learnt in economics so far, because it relates directly to two of the key terms.

The palm oil is used for many products and recently due to the pollution caused by the palm tree plantations, not as much oil can be produced without harming the environment. Many people who are environmentally aware will try to refrain from using products containing palm oil which are numerous. Products affected: processed food such as chips, instant noodles, soaps, shampoos and many cosmetic products. The awareness will cause the quantity of demand for these products to go down and as a result the prices will go down in order to keep the customers.

This article discusses the reasons which have resulted in a fall of fertilizer demand in India. The author states that the demand for fertilizer will drop 1/5  from 54.6 million tons  to 24 million tons by 2013. Additionally companies supplying fertilizers to the public have already experienced the first signs of decreasing demand and have been confronted with 50% decrease in potash consumption and a 30% decrease in the phosphate consumption.  Indian Companies supplying fertilizer had raised their prices the previous year due to record sales however these prices are now representing one of the key reasons for the decrease in consumption. India has experienced unpredictable rainfall this year meaning that farmers were unable to determine when they should  apply fertilizer. They knew that if they applied the expensive fertilizer without rainfall in the following days , the fertilizer would be wasted and therefore the farmer would have made a big loss. This has resulted in a decline in fertilizer consumption as farmers are not willing to take this large financial risk as the price for fertilizer is so high they will not be able to afford the economic consequences if the fertilizer is not applied at the correct time.  This links into our classwork as this scenario shows an ideal example of the law of demand. The law of demand states that as a price of a product rises the demand for it will decrease. In the article the demand for fertilizer falls as the price for fertilizer rises. 

This article tells us that fertilizer is become less scarce in India as the demand for fertilizer decreased. This means that less products are being consumed and therefore their is a surplus of the good on the market. Because the price for fertilizer was so high farmers have decided to invest the money in other products which will benefit their crops. The consumers will wait for the price to decrease before they start consuming fertilizer again. Producers will now decrease production and will sell their product at lower prices. As the demand for fertilizer has increased firms are not making as much profit and therefore they will shift their resource allocation to more profitable products.