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Coursework on Demand and Supply of Certain Resources Assignment Sample

Introduction:

In economics, the quantity of a given good that a consumer wants to purchase is referred to as the good's demand. The amount of a specific item that workers, producers, purchasers, etc. are willing to offer in the market is referred to as the supply (Mankiw, 2014). The amount required in regard to each price is defined as the sum of the individual wants of the total number of consumers in relation to that price. The quantity supplied refers to the total number of goods and services that the producers are willing to offer for sale at a particular price and period. Keeping other factors fixed, the law of demand describes the link between the price and the quantity desired. To put it another way, the law of supply asserts that as commodity prices rise, there is an increase in the quantity supplied rather than a decrease in the quantity requested (Mansfield & Yohe, 2000). When the economic forces of supply and demand are in balance while keeping other factors constant, the market is in equilibrium. The price of the specific commodity that is being produced, the pricing of other commodities, as well as consumer income and preferences, are the primary determinants of demand. The main determinants of supply depend on speculation, future expectations of the commodity's price level, and the cost of the production factors, among other things (Salvatore, 2008).

The Demand-Supply and The Movement and Shifts of The Curves:

The amount sought and price of the commodity have a negative relationship, while the quantity supplied and price have a positive association. The demand curve moves if the price of the good varies, but if other factors, such as income, taste, or preferences, alter that are not related to the price of the good, the demand curve shifts (Baumol & Blinder, 2015). For instance, the demand curve moves to the right as consumer income rises. The same is true for supply; a change in the level of the commodity's price will produce a movement along the supply curve, whilst a change in factors other than the price will cause a shift in the supply curve to the right or left (Shepard, 2012).

The Analysis of Demand and Supply of Resources of Australia:

One of Australia's top economists, Ross Garnaut, has referred to the present economic downturn as the "economic dog days." He believes that this downturn will only become worse as time goes on because it is related to China, the country's largest and most important trading partner, and iron ore, which is thought to be Australia's greatest export (Garnaut, 2015).

China's demand for steel has decreased recently, and the situation is still not better. As a result, the shipping of Australian iron ore to China has slowed down (Garnaut, 2015). In the past, the Australian economy flourished as a result of China's high demand for iron ore, which in turn led to sky-high demand for Australian iron ore. According to a report by the World Bank, the impact of China's economy's modest development would have a significant influence on nations that export goods to China, such as New Zealand and Australia, which have direct links to the region's supply chain (Garnaut, 2015). The Australian Prime Minister, Mr. Abbot, painted a rather bleak picture during a speech. In the following four years, a predicted 30 billion dollar drop in revenues is expected as a result of the lower iron ore prices (Garnaut, 2015). Since the administration was able to enact its first budget in May 2015, prices, which recently dropped to $95/tonne, have been cut in half. The mining industry in Australia was responsible for the nation's 23-year economic boom, which was sustained despite falling mining-related investment, which led to a slowdown in growth to 0.5% in the final quarter of 2014. (Garnaut, 2015). Glenn Stevens, the head of the central bank, described the sector's growth as being below trend.

Theoretically, the decline in steel demand was the exogenous factor that caused the demand curve for iron ore to move to the left (Rittenberg & Tregarthen, 2009). The important thing to keep in mind is that the negative demand shock that has affected the entire demand curve to move to the left—rather than the prices of the commodity—is what is driving the quantity demanded to increase or decrease (Gans, et al., 2011).

Conclusion:

From the economic assignments analysis of the mining industry, it can be inferred that the demand and supply of iron ore, or any other commodity, are influenced by factors other than just price, such as supply shocks, demand shocks, increases or decreases in consumer income, changes in consumer preferences, changes in consumer tastes, etc. These other factors also affect the demand and supply of the particular commodity.

References

Microeconomics: Principles and Policy, s.l. : Cengage Learning, 2015. Baumol, W., and Blinder, A.

Principles of microeconomics, by Gans, King, and Mankiw (2011, s.l. : Cengage Learning).

R. Garnaut, 2015. Unlucky Country: As China's economic growth slows, iron ore prices in the nation are falling. [Online] Information available at: http://www.economist.com/news/asia/21648612-country-suffers-plummeting-iron-ore-prices-Chinas-economic-growth-slows-unlucky-country
[Retrieved on November 26, 2015].

Essentials of Economics, N. Mankiw, s.l. : Cengage Learning. Principles of macroeconomics, by N. G. R. E. G. O. R. Y. Mankiw, s.l., Cengage Learning, 2014.

E. Mansfield and G. W. Yohe, 2000. Applications and theory of microeconomics. Norton in New York.

Principles of Microeconomics, L. Rittenberg and T. D. Tregarthen, Flat World Knowledge, 2009.

Microeconomics: theory and applications, D. Salvatore, 2008, OUP Catalogue, s.l.

Collaborative Demand and Supply Planning Between Partners, Shepard, D. 2012.

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