SUBMISSION OF THE ASSIGNMENT
When preparing an assignment, please do the following:
•Include your FULL NAME AND ID on the first page of your assignment
•Number the pages of your assignment.
•Include the word limit on the bottom of the first page.
•When saving your document, please ensure that you save as the following: “Full name _ Student id_Assignment 2_ ECON1008”
Hot weather curtails wheat crop
Published: December 14, 2015 – 12:09PM Sydney Morning Herald, 7:34 am The Western Australian
Australia’s wheat crop in 2015/16 is expected to be about two million tonnes lower than previously forecast because of prolonged hot weather, says agribusiness bank Rabobank.
With the Australian harvest drawing to a close, Rabobank expects the wheat crop to come in at 23.3 million tonnes. “Farmers are reflecting on what promised to be a bumper crop, with yields downgraded across the country on the back of the hot, dry spring,” Rabobank said on Monday. Much of Australia endured the warmest October on record. Rabobank grains and oilseeds analyst Ben Larkin said Western Australia is expected to harvest nine million tonnes of wheat. NSW and South Australia are expected to produce above-average results. But Victoria has been hit hard, with much of the wheat crop in the western regions cut for hay. The dry spell in Queensland has been partly offset by a reasonable season in areas west of Dalby. Mr Larkin said the national barley crop is expected to be above average, but canola is forecast to be 12 per cent lower than 2014/15 levels. Mr Larkin said modelling suggested that the El Nino weather pattern will continue until the end of the year, before starting to dissipate in early 2016. Rabobank said that in 2016, farmers should benefit from further weakening in the Australian dollar, which is expected to trade at 66 US cents by the end of 2016. But with global stocks of most agricultural commodities at record or near-record levels, prices are likely to be range-bound over the coming year.
Read the article titled “Hot weather curtails wheat crop” (Source: Sydney Morning Herald, Date: Dec 14th2015) and provide the analysis for the following statements in 4 different sections.
Assuming wheat is sold in a purely competitive market, use a well-labelled demand and supply diagram model to explain how market equilibrium price and quantity for wheat are determined. Clearly explain the equilibrating process. (4 marks)
It was initially expected there to be a bumper crop of wheat. Use demand and supply model to illustrate and explain the impact of consumer expectations of a future bumper crop on current period equilibrium price and output. Clearly explain the equilibrating process to answer the question. (5 marks)
Use demand and supply model to describe the impact on equilibrium quantity and price in the market for wheat, ceteris paribus, stemming from the prolonged hot weather. Explain the equilibrating process. Also, using an appropriate diagram, describe this impact on the price of related goods? (6 marks)
Discuss whether you think the price elasticity of demand for wheat to be elastic or inelastic. Based on your discussion of elasticity, illustrate and analyse the effect on total consumer expenditure in the wheat market following the impact of the hot weather conditions. (7 marks)
TAKE ADVANTAGE OF OUR PROMOTIONAL DISCOUNT DISPLAYED ON THE WEBSITE AND GET A DISCOUNT FOR YOUR PAPER NOW!