Assignment: Economics for Decision Making
Answer TWO questions in total.
Section I-There are two questions in Section. Choose only ONE question to answer
Section II- This has only one question. Answer this question in full.
For the questions write an essay style answer. In writing these essays you may need to undertake research related to the given scenario. This research should include supply demand, price and market information wherever appropriate.
SECTION I
Question 1
SCENARIO 1
As global food demand rises, climate change is hitting our staple crops
Source: Andrew Borrell, The conversation, March 1, 2017.
"While increases in population and wealth will lift global demand for food by up to 70% by 2050, agriculture is already feeling the effects of climate change. This is expected to continue in coming decades.
Scientists and farmers will need to act on multiple fronts to counter falling crop yields and feed more people. As with previous agricultural revolutions, we need a new set of plant characteristics to meet the challenge."
Economic analysis
Against the backdrop of above article extract write an essay explaining possible changes that could occur in the prices of food inthe future. If scientists aresuccessful in creating a "new set of plant characteristics to meet the challenge", explain the possible consequences in crop yields and subsequent price changes. Usean appropriate economic models in writing your answers and include assumptions you have made in this economic analysis.
SECTION II
Question 3
International Energy Agency in their Oil Market Report (March 2018) provides data on world oil price, oil demand and supply. Using the data on this source, calculate price elasticity of demand and price elasticity of supply of oil. Choose an appropriate time period for your calculations depending on the data availability. Show the steps in calculating demand and supply elasticities. Interpret estimated elasticity values (with their signs)and explain what the possible reasons for the observed estimates are. Use appropriate sources/ literature to support your arguments.
Notes:
1. Word Limit:Maximum word limit is 2000 (i.e 1000 words per question) (do not exceed the word limit). The references are not included in the word count.
Instructions:
When structuring your essay follow the instructions below.
1. No headings required. For each question write the answer (essay) and you can use separate paragraphs as you wish.
2. In the reference list, include at least five references e.g. newspaper articles, books (including your textbook) for each essay. The reference list should NOT becombined for the two essays.Use any referencing style.