Solution
Robert answered on
Dec 20 2021
Economics
Economic article analysis
Economics
Introduction
The chosen article relates to food prices and analyzes this based on demand and supply, dated
July 26,2012. Food prices has been a major concern for all economies. Food is a basic necessity
and countries cannot survive without food. Scarce supply of food due to changing weather
conditions leads to economical increase in prices. In this way food prices does require to be
made economical and this is possible only when supply is significantly increased. So it becomes
crucial for the purpose of ensuring that people are able to maintain their standard of living only
when supply is well balanced.
Concepts and theories
The concepts and theories of micro economics that are most relevant in this case include the
elationship between demand, supply and price. As supply decreases, prices proportionately
increase. Supply and prices are inversely proportional and have an inverse relationship between
them (Kanowski et al, 2003).
Demand, supply and prices are closely related. When demand exceeds supply, then we see a
shortage in supply and hence prices are high due to higher value placed for the commodity. In
case of there being excess supply and demand being shorter, then the prices fall.
http:
upload.wikimedia.org/wikipedia/commons/7/7a/Supply-and-demand.svg
Economics
The u
an poor are those who may be above the poverty line but are impoverished and cannot
fulfill the basic needs living in an u
an area. Poverty has for long been perceived as a bane in
societies all over the world. Poverty is that state of lack of resources where in a person does not
have the power or monetary resources to afford basic amenities including food, clothing, shelter
and water. Such are the cases that the imbalance in demand, supply and prices can cause and
hence it becomes crucial to strike a balance between supply and prices, especially in case of food
products as it is a basic necessity (Hoteling, 1999).
Apart from these concepts the concept of agriculture being an important industry in the economy
has been highlighted in the article. The agricultural business can be categorized into several
categories including manufacturing, production and selling. The agricultural cultivation and
growing of crops business has been very popular under the name of farming. Yet there are
several other businesses like mills, manufacturing of timber, food processing and making of
other products using raw materials from the agricultural farming. All of these aspects and
domains get impacted if basic farming is impacted (Kanowski et al, 2003).
Analysis of article and relevance to economic theories
The article explains the impact of the drought having led on the prices of food products including
corn, beef, chicken, milk and dairy products all of which are basic food products. Moreover as
United States is a major exporter of food products, it leads to an even intense impact outside the
USA, as the prices of these products touch the skies. In this way as the supply significantly
decreases, there is a proportionate rise in prices which proves that supply and price are inversely
proportionate to each other (nytimes.com, 2012).
The article provides an in depth analysis of the economic impact on the prices of food which is
mainly caused due to the disruption and imbalance that exists between the demand for food and
supply of food. Moreover in such cases of crisis it is only economic theories that will enable the
nation to understand the price shoot ups (Hoteling, 1999).
In this way this article successfully explains the usage of food in the global economy, the impact
that the demand and supply has on the pricing of food and food products as well as the fact that
growing demand food cannot be satisfied unless and until an alternative is found for food and
energy producing fuels in the form of biogas or other renewable fuels. Only then a global
Economics
alance can be created in the international economy or...