Economics - More Import Permits If Not Enough Chicken
ECO 415 Assignment 1
PART A
QUESTION 1
More Import Permits If Not Enough Chicken
JITRA: The government will issue permits to import chicken only if there is a shortage.
Deputy Agriculture and Agro-based Industry Minister Datuk Johari Baharom said this was unnecessary at the moment as there was a sufficient supply.
"There are enough chickens to meet demand for the fasting month and Hari Raya ," he said after having sahur (predawn meal) with villagers in Kampung Teluk Malek here yesterday. The local chicken farms produce between 1.4 million to 1.5 million birds per day and demand for chicken is less than 1.4 million daily.
The government will monitor the supply of chicken to avoid any shortage in the market, especially during the festive season. He said the farm price of RM4.70 per kg imposed since the beginning of the fasting month was reasonable, especially when compared with price in neighboring countries. He added that transportation costs and increase in demand were the contributing factors to price increase.
Adapted from New Straits Times, August 16, 2010
a) What is market equilibrium? With the aid of a diagram, explain how it is determined? (4 marks)
b) With the aid of a diagram, show the effect of an increase in demand for chicken in the domestic market. (4 marks)
c) Explain three (3) factors that may influence the supply of chicken in the domestic market. (6 marks)
d) What happens to the price of chicken in the domestic market if our government issue more permits to import chicken? Draw a diagram to support your answer. (3 marks)
e) Explain any two (2) possible factors that may influence the demand for chicken. (3 marks)
PART A
QUESTION 1
More Import Permits If Not Enough Chicken
JITRA: The government will issue permits to import chicken only if there is a shortage.
Deputy Agriculture and Agro-based Industry Minister Datuk Johari Baharom said this was unnecessary at the moment as there was a sufficient supply.
"There are enough chickens to meet demand for the fasting month and Hari Raya ," he said after having sahur (predawn meal) with villagers in Kampung Teluk Malek here yesterday. The local chicken farms produce between 1.4 million to 1.5 million birds per day and demand for chicken is less than 1.4 million daily.
The government will monitor the supply of chicken to avoid any shortage in the market, especially during the festive season. He said the farm price of RM4.70 per kg imposed since the beginning of the fasting month was reasonable, especially when compared with price in neighboring countries. He added that transportation costs and increase in demand were the contributing factors to price increase.
Adapted from New Straits Times, August 16, 2010
a) What is market equilibrium? With the aid of a diagram, explain how it is determined? (4 marks)
b) With the aid of a diagram, show the effect of an increase in demand for chicken in the domestic market. (4 marks)
c) Explain three (3) factors that may influence the supply of chicken in the domestic market. (6 marks)
d) What happens to the price of chicken in the domestic market if our government issue more permits to import chicken? Draw a diagram to support your answer. (3 marks)
e) Explain any two (2) possible factors that may influence the demand for chicken. (3 marks)