Economics Paper Essay Example for Free

Economics Paper Essay1 Define the term equilibrium worthThe cost at which quantity demanded by consumers and the quantity of goods and services supplied by firms is the same.3 With the help of an appropriate diagram and the information in extract B, explain why the world legal injury of sugar changed in 2009The bell of sugar rose to $0.40 per kilo in 2009 this is shown in the extract as it states that in 2009 sets in overbold York and London rose by 52% to its highest in almost three years. The diagram below shows how the innermost shift of supply cause by poor crop harvests and Indias %40 fall in siding of sugar affected the price of sugar due to its scarcity, leading to the %52 rise in price of sugar.Another factor that could drive home had an effect on the price of sugar would have been in 2008 in that location were poor crop harvests that year this led to a low level of supply in 2008 which raised the price of sugar due to its scarcity. This poor harvest would have had something to do with the land quality this whitethorn have affected the harvest in 2009.Supply constraints also had an effect, as due heavy rainwater the Columbian crop was damaged the rain also washed away some of the roads used to transport the products from the field to the market. So whatever crop the farmers managed to save from the rain was then prevented from reaching market, this would have contributed to the price rise in a way similar to the diagram above.India is a main maker of sugar, so much so that its sugar output is a critical factor in ascertain the world price of sugar. Indias output was forecast to fall by %40 so sole(prenominal) 15million tonnes of sugar would have been produced in the growing season this is well below Indias sugar outgo of 23million tonnes a year. This would mean that India wouldnt be inclined to export much of its sugar as in that locations already a deficit of supply in its own country. Although, with this large fall in supply therell most likely be a rise in sugar price in India the people may not be willing or able to pay the unused price so whatever amount of sugar is leftover could be exported, at a price which would lead to the %52 rise in London and New York sugar prices.