MIEC PROJECT :) by Amirah Shahril https://padlet.com/amirahs2501/djff8jpm4qmh GROUP 4 en-us 2018-07-05 04:13:53 UTC 2018-07-11 00:48:51 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Folder.png INTRODUCTION TO THE MARKET OF JASMINE RICE amirahs2501 https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269719766
  • Rice is a very important food source commodity. 
  • Mixed economic system because there is partial government intervention.
  •  PPF graph will shift inwards due to the reduction in the amount of resources.
    1. Excessive rain destroyed capital (crops, seeds)
    2. Change in military government's policy to devote less farmland to rice cultivation.
  • Reduction in resources --> reduced output  --> reduced yields of both types of rice.
    • ]]>     2018-07-09 09:32:45 UTC https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269719766     DEMAND AND SUPPLY amirahs2501 https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269720775 DEMAND
    • Demand of rice will increase.
    • Demand pressure remains strong in low-income countries that contain bulk of Asian populations because:
      1. Of continuous high population growth rates.
      2. Positive income growth.
    • The demand for rice is projected to increase by 70% over the next 30 years due to rapid population growth. 
    • Due to its hot and favorable climate, Asia is the largest producer and consumer of rice at 90%.

    SUPPLY
    The supply of Jasmine rice has fallen because:
    1. The country began growing the crop more extensively a decade ago in an effort to shift agriculture to more value-added export products. 
    2. Unfavourable weather conditions.
    3. U-turn in government policy.  
    4. The total output of premium Thai rice is expected to fall by 40%.
    5. Their overall rice paddy acreage dropped by 10%.
      • This means that farmers would be producing a lower quantity of premium rice due to the reduced farming area.

    This results in the supply curve shifting to the left.
    ]]>     2018-07-09 09:45:09 UTC https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269720775     ELASTICITY amirahs2501 https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269722576 PRICE ELASTICITY
    • Demand of jasmine rice is price elastic as there are substitutes available (eg. Basmati rice)
    • Since Jasmine rice is price elastic, this means that change in price will bring about a huge change in quantity demanded.

    CROSS PRICE ELASTICITY 
    • The substitute for Jasmine rice is Basmati rice. 
    • Basmati rice is the most expensive rice variety in the world while Jasmine rice is its cheaper alternative.
    • Therefore, buyers would choose which type of rice they want based on their taste and preferences, making Jasmine rice cross price elastic due to the presence of substitutes. 
    ]]>     2018-07-09 10:06:14 UTC https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269722576     MARKET https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269811256 Market Structure:Perfect Competition
    1. Many sellers and buyers because rice is treated as a staple food in Asia.
    2. No barriers of entry because rice is crop with low cost of labor and rice firm is relatively easier to set up.
    3. High level of quality information.
    4. Little to no market power.
    There is government intervention through govt subsidies which affect opportunity cost.

    Market Equilibrium
    • Due to the shortage of rice supply in the market, the price of rice has to be increased in order to return to market equilibrium.
    ]]>     2018-07-10 06:07:22 UTC https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269811256     PRODUCTION AND COSTS https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269813122 Long-run production – all variable costs, no fixed costs
    • land space reducing -> no longer a fixed resource
    • employment of capital and labour increases (due to these factors no longer being a fixed resource)  -> scale of production ­increases
    ]]>     2018-07-10 06:34:31 UTC https://padlet.com/amirahs2501/djff8jpm4qmh/wish/269813122