Economics Ib Hl - Personal Commentary 1
COMMENTARY COVERSHEET
• Name: Johanna Troedsson
• School: Söderportgymnasiet School #: 1216
• Commentary #: 1
• Referring to section 2 of the syllabus
• Date written: 3rd of February 2011
• Date of article: 18th of January 2011
• Source: http://www.dn.se/ekonomi/brant-stigande-matpriser-globalt-hot, 1/18/2011, 14.30
• Wordcount: 731 words
Commentary Number 1
The food prices in our world are on their way up to a level almost impossible to manage. As we try to become more environmentally friendly, we have started to reallocate our resources, especially from food to fuel. According to an article published in Dagens Nyheter, this is together with the growing population and poor weather the greatest reason for the increasing food prices.
[pic]
The size of the population is one of the factors affecting the demand, which is defined as the quantity of a good or a service that consumers are willing and able to purchase at a given price in a given time period. As the population of the world grows, so does the demand for food. And as we aim at becoming more environmentally conscious, we tend to prioritize environmentally friendly fuel over our basic food by using food to produce fuel. This does also contribute to the increasing demand for food, which causes the demand curve to shift to the right, from D to D1 as shown in the diagram above. And as the curve shifts, a new equilibrium must be reached by raising the price from P to P1 in order for demand and supply, which is defined as the willingness and ability of producers to produce a quantity of a good or a service at a given price in a given time period, to be equal.
Given that the price is raised it will become more favourable for producers to increase their supply, referring to the Law of Supply which states that “as the price of a product rises, the quantity supplied of the product will usually increase, ceteris paribus (all other things being equal)”. If the producers are able
• Name: Johanna Troedsson
• School: Söderportgymnasiet School #: 1216
• Commentary #: 1
• Referring to section 2 of the syllabus
• Date written: 3rd of February 2011
• Date of article: 18th of January 2011
• Source: http://www.dn.se/ekonomi/brant-stigande-matpriser-globalt-hot, 1/18/2011, 14.30
• Wordcount: 731 words
Commentary Number 1
The food prices in our world are on their way up to a level almost impossible to manage. As we try to become more environmentally friendly, we have started to reallocate our resources, especially from food to fuel. According to an article published in Dagens Nyheter, this is together with the growing population and poor weather the greatest reason for the increasing food prices.
[pic]
The size of the population is one of the factors affecting the demand, which is defined as the quantity of a good or a service that consumers are willing and able to purchase at a given price in a given time period. As the population of the world grows, so does the demand for food. And as we aim at becoming more environmentally conscious, we tend to prioritize environmentally friendly fuel over our basic food by using food to produce fuel. This does also contribute to the increasing demand for food, which causes the demand curve to shift to the right, from D to D1 as shown in the diagram above. And as the curve shifts, a new equilibrium must be reached by raising the price from P to P1 in order for demand and supply, which is defined as the willingness and ability of producers to produce a quantity of a good or a service at a given price in a given time period, to be equal.
Given that the price is raised it will become more favourable for producers to increase their supply, referring to the Law of Supply which states that “as the price of a product rises, the quantity supplied of the product will usually increase, ceteris paribus (all other things being equal)”. If the producers are able