Rise in food prices

7 03 2011


Cost of Factors of Production

Increase in cost of wheat and crude oil


A little Colbert to start the week…

7 03 2011

The Word – Economic Boom

The Future of Laptops

7 03 2011

According to this Globe and Mail article, PCs are losing the interest of the public.

Gartner Inc. cut it’s forecast for the sale of PCs in the future after global sales failed to reach the projected preliminary forecast. The IT-research company attributes their adjusted forecast to markets over the world exhibiting less demand for the traditional PC, particularly the ever-growing market of China. The company attributes this decline in demand to the tablet PC. Since the explosive launch of the iPad, consumers “appear to be hesitating” to buy traditional PCs, but instead await new tablet computers. This decline also comes amid the announcement of the launch of the new and improved iPad 2.0, the anticipated launch of Blackberry’s playbook, and the proclaimed “iPad Killer” – the Motorola Xoom. These are the newest and hottest “fashions” of technology that everyone wants to get their hands on.

Consumer taste’s are changing, and thus the demand of tablets rise, stealing customers from PCs. The less buyers there are the more the demand will drop. China’s giant population also contributes to the giant change in demand. More and more Chinese consumers are emerging in the middle class, with more money and buying power. Tablet computers definitely cost more than PCs do, but with the stronger spending power will cover the gap.

The manufacturers of PCs will lower the amount produced because they expect the price of PCs to drop. The seller’s expectations will lower supply so that they will not have a surplus in the future. IT companies also realize that these tablet computers will be the next big driving force in the sector and see it as a profit of another good. They will shift their resources to adapt to the changing market. This will also decrease the supply produced.

Also note that on the graph, demand is shown as decreasing more than supply. The reason for this is because most IT companies have not developed advanced enough tablet computers to sell competitively with market leaders Apple, Motorola, and Blackberry. They are forced to continue marketing their PCs until they are able to enter the tablet computer market.

Demand For imported Rice Falls in Japan

7 03 2011

Since the demand for rice imports in China are increasing at a high rate it is having a negative effect on Japan.  The popularity of  imported rice has decreased because of high prices in Japan due to the high demand for rice in China. “Demand for imported rice for human consumption in Japan in fiscal 2010 ending March is set to fall short of the government’s planned import level of 100,000 tons” .  The imported rice was auctioned eight times this year and the bids were only 30% that of the original import level planned.  Basically the demand for imported rice in Japan decreased and the quantity imported decreased drastically and at the same time the demand for imported rice was increasing and China therefore leading the increase in price for the rice in both Japan and China. So the number of buyers of imported rice in Japan decreased so there is less demand. The demand determinant in effect would be the number of buyers.

Article Link

Rise in Demand for Electric Cars

7 03 2011

Because of the riots in Libya, gas prices are continually and rapidly rising. In fact, since the riots in Libya, more and more people are demanding electric cars. This is because of the demand determinant “price of a complementary good” of the conventional cars. In this case, the complementary good is the gas. As the gas prices are rising rapidly, less people are willing to buy conventional cars, thinking that the gas prices will continually rise for the next few months. Therefore, more and more people are looking for the alternatives that do not use gas as the fuel. Thus, an increasing number of people are demanding electric cars instead of the conventional cars.



Luxury Products in Demand

7 03 2011

The sales of luxury products (i.e. Fendi, Dior, Louis Vuitton, Marc Jacobs, etc) increased dramatically in 2010. It surged 17% to 20.3 billion euros (28 billion US Dollars). The change in the buyers’ income and number of buyers caused LVMH’s (LVMH Moët Hennessy • Louis Vuitton S.A.) net income to soar. Most of the increased sales came from China due to the Chinese economic situation. Chinese shoppers have more money than ever before and more rich people have more interests in buying high-end products. Luxury goods can be only bought in brands’ exclusive boutiques, which also makes the products more attractive to rising Chinese affluents.

Sorry, I didin’t provide the link.