Increased in Wheat Prices and Maid’s Pay (a Micro-Economics Perspective Report)
INTRODUCTION
1. Micro-economics is the study of the choices that individuals and businesses make, the way these choices interact in market, and the influence of governments.1 This report analyses the micro-economics of 2 newspaper articles - “Bakeries Raise Prices As Cost Of Wheat Soars” and “Pay Hike As Supply Of Maids Dries Up”, based on perspectives of micro-economics theories, principles and concepts.
ARTICLE 1 - ECONOMIC ANALYSIS ON “BAKERIES RAISE PRICES AS COST OF WHEAT SOARS”
2. Summary of Article. This article highlighted the issue of bad weather (“Land” – a Factor of Production) and how it affected the basic commodities needs of the people (consumers). Bakeries raise prices due to the increase in cost of wheat and related commodities. This rise was due to the global shortage of wheat because of bad weather in wheat producing countries and the imposition of bans on exports through government interventions. The price of flour has risen from S$29 to S$32 per 25kg in just 2 months. Rise in prices of soya beans and sugar led to further increase in prices of flour-based products. This burden is being transferred to the consumers. An increase in price of 5% to 10% is seen in flour-based products for both local and export sales. If bad weather continues, the increase in prices of these weather dependent crops will continue to rise. Consumers will have to spend more or choose other alternatives since the next price review will only be done in 6 months’ time.
3. Factors of Production. This article illustrates ‘How’ goods and services are produced (one of the 4 categories of Factors of Productions):
a. Land. Wheat is grown on land and depends on weather for their growth and harvesting. Bad weather such as floods in Australia or drought in Russia where majority of the world’s wheat and other crops are produced, have great impacts on the quantity for harvests and exports. Russia’s ban on export had caused the world’s supply to fall rapidly since
1. Micro-economics is the study of the choices that individuals and businesses make, the way these choices interact in market, and the influence of governments.1 This report analyses the micro-economics of 2 newspaper articles - “Bakeries Raise Prices As Cost Of Wheat Soars” and “Pay Hike As Supply Of Maids Dries Up”, based on perspectives of micro-economics theories, principles and concepts.
ARTICLE 1 - ECONOMIC ANALYSIS ON “BAKERIES RAISE PRICES AS COST OF WHEAT SOARS”
2. Summary of Article. This article highlighted the issue of bad weather (“Land” – a Factor of Production) and how it affected the basic commodities needs of the people (consumers). Bakeries raise prices due to the increase in cost of wheat and related commodities. This rise was due to the global shortage of wheat because of bad weather in wheat producing countries and the imposition of bans on exports through government interventions. The price of flour has risen from S$29 to S$32 per 25kg in just 2 months. Rise in prices of soya beans and sugar led to further increase in prices of flour-based products. This burden is being transferred to the consumers. An increase in price of 5% to 10% is seen in flour-based products for both local and export sales. If bad weather continues, the increase in prices of these weather dependent crops will continue to rise. Consumers will have to spend more or choose other alternatives since the next price review will only be done in 6 months’ time.
3. Factors of Production. This article illustrates ‘How’ goods and services are produced (one of the 4 categories of Factors of Productions):
a. Land. Wheat is grown on land and depends on weather for their growth and harvesting. Bad weather such as floods in Australia or drought in Russia where majority of the world’s wheat and other crops are produced, have great impacts on the quantity for harvests and exports. Russia’s ban on export had caused the world’s supply to fall rapidly since