The Economist July 12th-18th 2008
The recent diminishing food supply has caused riots in some poor countries. Most of the food are consumed by people in the rich world.
-- increase in food price:
--"the industry has taken cheap oil for granted. Oil fuels transportation and farm machinery, and natural gas is the basis of synthetic nitrogen production" (increase in cost of production)
--water is becoming increasingly scarce and expensive (increase in cost of production,decrease in supply, increase in price)
These factors will "force a complete rethinking of the way we make food.
For years, food price was kept down due to government subsidy, plenty of water and easily-made nitrogen fertilizer.
"Consumers have grown eating too much."
In the U.S. : "obesity has caused 400,000 premature deaths in America"
Possible solutions:" halve the size of portions in all American restaurants" (to decrease demand)
organic produce, genetically modified crops.
Model for the future: "easily obtainable seasonal foods that do not need to be transported huge distances " (decrease in cost of production, increase in supply)
Shao Chen
Sunday, July 20, 2008
Friday, May 23, 2008
i believe that we are too tired of reading, memorising and reading, memorising and reading... since today signifies the begining of June Holidays, why not we have something more interesting fun and shocking for econs?
the first video is on some shocking facts of USA:
the second video is on an interesting question which sets you thinking(which also puzzles Einstein, it claims):
ENJOY!
xian
the first video is on some shocking facts of USA:
the second video is on an interesting question which sets you thinking(which also puzzles Einstein, it claims):
ENJOY!
xian
Wednesday, May 21, 2008
No Excess Capacity
LONDON, ENGLAND(CNN)--Keeping up with the world's oil demands is a full-time job. World oil consumption is 87 barrels a day but Gulf producers say they can't increase productionOff the Arabian Peninsula oil rigs pump night and day, 365 days a year to produce just part of the two and a half million barrels of oil that come out of the United Arab Emirates.
Demand keeps on rising but from Abu Dhabi to Qatar most of the Gulf's oil producers say they can't increase production any more.
________________THINK，THINK，THINK，THINK__________________________
Since big non-OPEC producers like Britain, Norway and Mexico have decreased their oil production, Gulf oil producers will be in control of the vast majority of the world's output. Hence in this area, Gulf oil producers have the monopoly power due to the large market share.
From the passage, i think the shortage of oil is most likely to be artificially created. The purpose for doing this is to increase the price of the oil in the market. As mentioned, oil production from non-OPEC courties is droped(Thus Lack of substitute). Hence by restricting the output, the present price will go up to reach the new equilibrium price. Since TR=P*Q(price inelastic). Thus, increase price will also cause increase in TR.
However, "No Excess Capacity" may also be true in some extent. Since the world market is changing. AS statistics have shown, a decade ago demand was running at 74 million barrels a day. Today, even with an economic slowdown in the U.S. and Europe, global demand is estimated to hit a record 87 million barrels a day.
It continues to surge because of rapidly developing countries like China and India, not to mention the requirements of the Gulf states' booming. By 2030, world demand is expected to reach 115 million barrels a day.
In this sence, it really exceeds the capacity of the Gulf producers due to the dramatically increase in demand.
Demand keeps on rising but from Abu Dhabi to Qatar most of the Gulf's oil producers say they can't increase production any more.
________________THINK，THINK，THINK，THINK__________________________
Since big non-OPEC producers like Britain, Norway and Mexico have decreased their oil production, Gulf oil producers will be in control of the vast majority of the world's output. Hence in this area, Gulf oil producers have the monopoly power due to the large market share.
From the passage, i think the shortage of oil is most likely to be artificially created. The purpose for doing this is to increase the price of the oil in the market. As mentioned, oil production from non-OPEC courties is droped(Thus Lack of substitute). Hence by restricting the output, the present price will go up to reach the new equilibrium price. Since TR=P*Q(price inelastic). Thus, increase price will also cause increase in TR.
However, "No Excess Capacity" may also be true in some extent. Since the world market is changing. AS statistics have shown, a decade ago demand was running at 74 million barrels a day. Today, even with an economic slowdown in the U.S. and Europe, global demand is estimated to hit a record 87 million barrels a day.
It continues to surge because of rapidly developing countries like China and India, not to mention the requirements of the Gulf states' booming. By 2030, world demand is expected to reach 115 million barrels a day.
In this sence, it really exceeds the capacity of the Gulf producers due to the dramatically increase in demand.
Monday, May 19, 2008
Sunday, May 18, 2008
Oil price
"With the price of oil hurtling towards $130 a barrel, the cost of petrol in America crept even higher just before the start of the summer driving season, which begins on Memorial Day( the last Monday in May). Meanwhile, the International Energy Agency again cut its forecast for the growth in demand for oil this year, causing analysts to ponder whether rising oil prices would cause global energy consumption to fall."
From page 10, "The Economist" May 17th - 23rd 2008,
A quite short article... What are the reasons contributing to the rise in oil price?
There's an increasing demand from expanding economies, mainly in China and India but also elsewhere, while supply has been artificially curtailed through the OPEC oil cartel.
Efforts to increase supply lag behind the increasing demand of recent years. Regulation and environmental efforts have also increased the shortage and price of oil.
This is because there is a limited amount of fossil fuel, and the remaining accessible supply is consumed more rapidly each year. Increasingly, remaining reserves become more technically difficult to extract and therefore more expensive. Eventually, reserves will only be economically feasible to extract at extremely high prices.
In addition, turbulence in the Middle East, the world's largest oil-producing region, has led to decreased exports, especially civil unrest in Iraq, after the 2003 U.S. invasion. Outside the Middle East, Venezuela has experienced strikes and political turbulance, and there is growing instability in West Africa.
Another reason may be oil's historically high ratio of energy returned on energy invested continues a significant decline. The increased price of oil also makes other non-conventional and less cost-efficient sources of oil attractive to businesses, e.g. Canadian tar sands
Other issues, such as labour strikes, hurricane threats to oil platforms, fires and terrorist threats at refineries, and other short-lived problems, have also had some effect on oil prices.
Recently, there has also been increasing speculation on the oil futures market that tends to push up prices.
Low supply and high demand lead to high price.
When less people are able to afford oil, the demand for oil will decrease. Thus global energy consumption may fall.
From page 10, "The Economist" May 17th - 23rd 2008,
A quite short article... What are the reasons contributing to the rise in oil price?
There's an increasing demand from expanding economies, mainly in China and India but also elsewhere, while supply has been artificially curtailed through the OPEC oil cartel.
Efforts to increase supply lag behind the increasing demand of recent years. Regulation and environmental efforts have also increased the shortage and price of oil.
This is because there is a limited amount of fossil fuel, and the remaining accessible supply is consumed more rapidly each year. Increasingly, remaining reserves become more technically difficult to extract and therefore more expensive. Eventually, reserves will only be economically feasible to extract at extremely high prices.
In addition, turbulence in the Middle East, the world's largest oil-producing region, has led to decreased exports, especially civil unrest in Iraq, after the 2003 U.S. invasion. Outside the Middle East, Venezuela has experienced strikes and political turbulance, and there is growing instability in West Africa.
Another reason may be oil's historically high ratio of energy returned on energy invested continues a significant decline. The increased price of oil also makes other non-conventional and less cost-efficient sources of oil attractive to businesses, e.g. Canadian tar sands
Other issues, such as labour strikes, hurricane threats to oil platforms, fires and terrorist threats at refineries, and other short-lived problems, have also had some effect on oil prices.
Recently, there has also been increasing speculation on the oil futures market that tends to push up prices.
Low supply and high demand lead to high price.
When less people are able to afford oil, the demand for oil will decrease. Thus global energy consumption may fall.
Saturday, May 17, 2008
Effects of Olympics on China's Economy
Chinese Tourism Expects a Boost from Olympics
The chief representative in China for Switzerland Tourism pointed out that Beijing, a city with a long history, would host more and more foreigners in the next few years, amid rapid urban construction.
the tourist sector has best witnessed China's thriving economic growth and its opening up to the outside world.
Perhaps the Olympics will not bring benefits to urban construction of other regions than Beijing. But as for tourism, that is another story, as most foreigners traveling to Beijing would often ask themselves, "Where is my next destination in China?"
"The bid success will also be conducive to building tourism infrastructure in different places. I estimate that local tourism bureaus will come to Beijing to do promotions before and after the Games," said a senior official with the China National Tourism Administration.
Many scenic spots will take active measures to improve their management levels, in the hope that they can be listed as one of the Olympics tour destinations.
Beijing's success demonstrates the strong confidence the world holds in China and it is a positive gesture to China's fast-growing economy.
Xu Shengli, a representative in China for the German National Tourist Office, said that Beijing's success will generate enormous power to stimulate the tourism industry just like nuclear fissions.
He said, the modernization of tourism demands constant exchanges among various nations. Beijing will host tens of thousands of international athletes and coaches, and embrace an unprecedented tourism wave in the next seven years."
Besides, Beijing can learn from Germany in terms of environmental protection and the efforts it contributes to energy saving.
Liu Dunren, director of the Canadian Tourism Committee in Beijing office said, "I am so gratified at Beijing's success. Montreal, where I used to live, has held the summer and winter Olympics. I believe Beijing will be more successful in seven years."
It is reported that several Chinese business investigation groups and individual tourists have traveled to Canada to learn advanced management.
With the exponential increase in tourists visiting China and the increase in quality of the services provided what can we foresee about China's future economy?
THINK THINK THINK O.O
China, Greece to cooperate in Olympic tourism promotion?
recently im sure everyone has seen the various advertisements on Beijing Olympics etc. What are the purposes of such advertisements? Solely to promote the fact that the next Olympics is to be held in Beijing? or are there other purposes e.g. attracting tourists to visit Beijing and various parts of China to submerge themselves in the olympic atmosphere, announcing to the world how organised China is now etc.
what are the benefits brought about by painting such a beautiful picture of China and olympics? attracting more foreign investors? boosting the confidence others(investors, consumers, producers) have on China?
patricia(:
The chief representative in China for Switzerland Tourism pointed out that Beijing, a city with a long history, would host more and more foreigners in the next few years, amid rapid urban construction.
the tourist sector has best witnessed China's thriving economic growth and its opening up to the outside world.
Perhaps the Olympics will not bring benefits to urban construction of other regions than Beijing. But as for tourism, that is another story, as most foreigners traveling to Beijing would often ask themselves, "Where is my next destination in China?"
"The bid success will also be conducive to building tourism infrastructure in different places. I estimate that local tourism bureaus will come to Beijing to do promotions before and after the Games," said a senior official with the China National Tourism Administration.
Many scenic spots will take active measures to improve their management levels, in the hope that they can be listed as one of the Olympics tour destinations.
Beijing's success demonstrates the strong confidence the world holds in China and it is a positive gesture to China's fast-growing economy.
Xu Shengli, a representative in China for the German National Tourist Office, said that Beijing's success will generate enormous power to stimulate the tourism industry just like nuclear fissions.
He said, the modernization of tourism demands constant exchanges among various nations. Beijing will host tens of thousands of international athletes and coaches, and embrace an unprecedented tourism wave in the next seven years."
Besides, Beijing can learn from Germany in terms of environmental protection and the efforts it contributes to energy saving.
Liu Dunren, director of the Canadian Tourism Committee in Beijing office said, "I am so gratified at Beijing's success. Montreal, where I used to live, has held the summer and winter Olympics. I believe Beijing will be more successful in seven years."
It is reported that several Chinese business investigation groups and individual tourists have traveled to Canada to learn advanced management.
With the exponential increase in tourists visiting China and the increase in quality of the services provided what can we foresee about China's future economy?
THINK THINK THINK O.O
China, Greece to cooperate in Olympic tourism promotion?
recently im sure everyone has seen the various advertisements on Beijing Olympics etc. What are the purposes of such advertisements? Solely to promote the fact that the next Olympics is to be held in Beijing? or are there other purposes e.g. attracting tourists to visit Beijing and various parts of China to submerge themselves in the olympic atmosphere, announcing to the world how organised China is now etc.
what are the benefits brought about by painting such a beautiful picture of China and olympics? attracting more foreign investors? boosting the confidence others(investors, consumers, producers) have on China?
patricia(:
Monday, April 21, 2008
S'pore luxury home prices surge 31%, April 21
well. first of all, i couldn't find the article on Straits Times online so i had to settle for a rather, well, nice blog that provides us with a whole gamut of articles from the Straits Times.
okay
in essence, the article first shows us a table of prices of homes in an assortment of countries, and it basically acts as a juxtaposition of the prices. and the table is here
so we see that in recent years, the average prices of top-end properties in the Republic have actually risen by 31 per cent to £1,197 (S$3,232) per sq ft. This is the sixth-biggest price jump globally, according to a survey by Knight Frank and Citi Private Bank.
now we know of the sub-prime crisis that had rocked, and is still rocking, America. the crisis had been labeled as one of the worst since the Great Depression. so one might actually assume that a crisis would undoubtedly result in a lower income right? so let's just apply some elasticity concepts here. now a recession would indubitably lead to a decreased income. and as the name suggests, "Luxury homes" are, well, a luxury good. thus the luxury homes can in fact be deemed income elastic. so wouldn't a decrease in income due to the recession lead to a greater than proportionate decrease in demand? if that was the case, prices of the homes would inevitably plummet.
however, the converse is true, and in actuality, the prices for luxury homes in Singapore have risen by an incredible 31%. and globally, the 2008 Annual Wealth Report found that the prices of luxury homes around the world increased, on average, by 11 per cent last year.
a probable explanation for such an occurrence could be aptly explained and accounted for.
The sub-prime credit crisis did indeed result in falling prices, restricted financing and declines in sale volumes. And considering the fact that the USA has established itself as a world economic giant, with a myriad of countries (including Singapore) reliant on trade with the USA, one would probably expect the crisis to hit Singapore as well, and probably lead to a sharp drop in income. However, it has been observed that the sub-prime credit crisis has led to an emergence of a new breed of super rich.
The rise in commodity price rises have brought wealth and created a significant number of additional new high net worth individuals. This had added more than 8,500 additional wealthy residents in 2007.
As such, this rising affluence has generated another market for second homes and holiday homes.
so while a recession should, by right, result in a decreased income, it has conversely led to a spike in income for a significant number of individuals. as such, this increased affluence has led to a spike in the demand for luxury homes in Singapore.
now i must seek your pardon for being incapable of drawing a graph using a computer, because i actually know next to nothing about drawing a graph using whatever software the computer may provide. so i shall attempt to explain using words. and considering the level of economic knowledge this class possesses, i'm quite certain that you would understand.
so here i go.
2 possibilities.
1) supply remains stagnant as in a short period of 1 year, we would probably not expect too sharp a rise in the supply of luxury homes.
2) supply rises. producers attracted by the soaring prices of the commodity (which in this case is the luxury home), thus increasing supply. SS shifts to right.
either way, with the increased demand for luxury homes due to increased affluence, the DD curve shifts right as well..
this would lead to a significant rise in the prices of luxury homes in Singapore, which in this case was a 31% rise.
so there we have an account of the rising prices of luxury homes.
i must say that my answer is not perfect and i know that it isn't. so comment on it and i can learn from it (:
so that's just about it.
Bryan Ong
well. first of all, i couldn't find the article on Straits Times online so i had to settle for a rather, well, nice blog that provides us with a whole gamut of articles from the Straits Times.
okay
in essence, the article first shows us a table of prices of homes in an assortment of countries, and it basically acts as a juxtaposition of the prices. and the table is here
so we see that in recent years, the average prices of top-end properties in the Republic have actually risen by 31 per cent to £1,197 (S$3,232) per sq ft. This is the sixth-biggest price jump globally, according to a survey by Knight Frank and Citi Private Bank.
now we know of the sub-prime crisis that had rocked, and is still rocking, America. the crisis had been labeled as one of the worst since the Great Depression. so one might actually assume that a crisis would undoubtedly result in a lower income right? so let's just apply some elasticity concepts here. now a recession would indubitably lead to a decreased income. and as the name suggests, "Luxury homes" are, well, a luxury good. thus the luxury homes can in fact be deemed income elastic. so wouldn't a decrease in income due to the recession lead to a greater than proportionate decrease in demand? if that was the case, prices of the homes would inevitably plummet.
however, the converse is true, and in actuality, the prices for luxury homes in Singapore have risen by an incredible 31%. and globally, the 2008 Annual Wealth Report found that the prices of luxury homes around the world increased, on average, by 11 per cent last year.
a probable explanation for such an occurrence could be aptly explained and accounted for.
The sub-prime credit crisis did indeed result in falling prices, restricted financing and declines in sale volumes. And considering the fact that the USA has established itself as a world economic giant, with a myriad of countries (including Singapore) reliant on trade with the USA, one would probably expect the crisis to hit Singapore as well, and probably lead to a sharp drop in income. However, it has been observed that the sub-prime credit crisis has led to an emergence of a new breed of super rich.
The rise in commodity price rises have brought wealth and created a significant number of additional new high net worth individuals. This had added more than 8,500 additional wealthy residents in 2007.
As such, this rising affluence has generated another market for second homes and holiday homes.
so while a recession should, by right, result in a decreased income, it has conversely led to a spike in income for a significant number of individuals. as such, this increased affluence has led to a spike in the demand for luxury homes in Singapore.
now i must seek your pardon for being incapable of drawing a graph using a computer, because i actually know next to nothing about drawing a graph using whatever software the computer may provide. so i shall attempt to explain using words. and considering the level of economic knowledge this class possesses, i'm quite certain that you would understand.
so here i go.
2 possibilities.
1) supply remains stagnant as in a short period of 1 year, we would probably not expect too sharp a rise in the supply of luxury homes.
2) supply rises. producers attracted by the soaring prices of the commodity (which in this case is the luxury home), thus increasing supply. SS shifts to right.
either way, with the increased demand for luxury homes due to increased affluence, the DD curve shifts right as well..
this would lead to a significant rise in the prices of luxury homes in Singapore, which in this case was a 31% rise.
so there we have an account of the rising prices of luxury homes.
i must say that my answer is not perfect and i know that it isn't. so comment on it and i can learn from it (:
so that's just about it.
Bryan Ong
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