UNIB20014 Lecture 9: all-lec-notes-41-43

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purplechinchilla273

29 May 2018

School

University of Melbourne

Department

University Breadth Subjects

Course

UNIB20014

Professor

Julia

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LECTURE'13:'OUTCOMES'&'HISTORY'

TODAY'LECTURE'WILL:'-'apply'the'economic'model'to'explain:'

- the'quantity,'price'and'expenditure'of'food.'''

- the'imports'and'exports.''

- discuss'the'outcomes'for:'

o individual'consumers/'food'security/'poverty.'

o farm'production'and'producers.'

o incomes'for'companies'involved'with'post'farming'processes.'

- attempt'to'explain'history'in'terms'of:'

o the'trend'of'increasing'food'prices'with'increasing'quantity.'

o volatility'of'food'prices'in'2008/2009.'

EQUILIBRIUM&&

These'lines'can'be'influenced'by'various'factors'–'this'alters'the'equilibrium'–'where'the'

lines'intersect'–'therefore'this'alters'the'market'price.'

- Supply'is'influence'by'input'costs/'climate/'technology/'policies.'

- Demand'is'influenced'by'population/'income/'diet/'polities.''

THE'INTERSECT'IS'THE'EQUILIBRIUM'BECAUSE:'

- quantity'supplied'is'higher'than'the'demand'–'this'results'in'a'surplus.'–'price'lowers.''

- quantity'supplies'is'lower'than'demand'–'shortage.''

The'demand'produced'and'purchased'–'influence'the'supply'and'demand'–'this'creates'the'

equilibrium'where'the'market'price'is'determined.'

- Producer'Income'='Revenue'–'expenditure.'

- Revenue:'price'x'quantity.'

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Document Summary

L e c t u r e 1 3 : o u t c o m e s & h i s t o r y. These lines can be influenced by various factors this alters the equilibrium where the lines intersect therefore this alters the market price. Supply is influence by input costs/ climate/ technology/ policies. Demand is influenced by population/ income/ diet/ polities. Quantity supplied is higher than the demand this results in a surplus. Quantity supplies is lower than demand shortage. The demand produced and purchased influence the supply and demand this creates the equilibrium where the market price is determined. When demand and supply curve shift the line itself remains the same just the position moves left or right depending on increase or decrease. curve shifts outward (right) when demand increases. E. g. population growth/ higher income/ use of biofuels. This results in higher prices and more quantity produced.

Related Questions

The table below shows the demand and supply schedules for rolls of film.

Price	Quantity demanded	Quantity supplied
($ per roll)	(rolls per week)	(rolls per week)
2.00	3,000	1,000
3.00	2,500	1,500
4.00	2,000	2,000
5.00	1,500	2,500
6.00	1,000	3,000

a. Explain the concepts of demand, supply, and market equilibrium. What is the market equilibrium price for rolls of film? What is the equilibrium quantity?

b. If the price of film is $3 a roll, describe the situation in the film market. Is there shortage or surplus at this price? Explain how market equilibrium is restored.

c. A rise in income increases the quantity demanded by 1,000 rolls a week at each price. Draw a new table to account for this change in demand.

What will be the new equilibrium price? Which quantity will be traded? Explain how the film market adjusts to its new equilibrium.

d. The number of film production lines increases, and at the same time, people switch to digital cameras. How do these events influence demand and supply? Do they create a shortage or a surplus at the equilibrium price in part a? Describe how the price and quantity change.

The table below shows the demand and supply schedules for rolls of film.

Price	Quantity demanded	Quantity supplied
($ per roll)	(rolls per week)	(rolls per week)
2.00	3,000	1,000
3.00	2,500	1,500
4.00	2,000	2,000
5.00	1,500	2,500
6.00	1,000	3,000

a. Explain the concepts of demand, supply, and market equilibrium. What is the market equilibrium price for rolls of film? What is the equilibrium quantity?

b. If the price of film is $3 a roll, describe the situation in the film market. Is there shortage or surplus at this price? Explain how market equilibrium is restored.

c. A rise in income increases the quantity demanded by 1,000 rolls a week at each price. Draw a new table to account for this change in demand.

What will be the new equilibrium price? Which quantity will be traded? Explain how the film market adjusts to its new equilibrium.

"Shortages, price controls, and queuesDuring the late 1980s and early 1990s, economic reforms initiated by Soviet president Mikhail Gorbachev began to raise consumer incomes; however, the Soviet government continued to impose price ceilings on basic goods like food, clothing, and household goods. As higher income led to increased demand, severe shortages of many goods and long lines at all kinds of stores became common. Finally, in January 1992, a new Russian government under president Boris Yeltsin removed retail price controls on most goods. Within a month, prices more than doubled on average, and lines disappeared. Analyze these events using the supply and demand model. First draw a supply and demand diagram for some normal good such as butter. Show the market in equilibrium at a price of 1 ruble per kilo before the beginning of the Gorbachev reforms. Draw a horizontal line at that level to represent the price ceiling; no butter can be sold for more than 1 ruble per kilo. Next show the effect of rising income. Does it shift the supply curve? Does it shift the demand curve? What is the shortage or surplus at the controlled price? After the price control ends, assuming no further shift in the supply and demand curve, what happens to the price? What happens to the shortage or surplus?"

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UNIB20014 Lecture 9: all-lec-notes-41-43

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