Floods and Global Climate Chaos

The areas of Thailand affected by floods.

In year 2011, the economy of some countries was unstable. According to the articles in The Star and Information Week – Big Data, there were a few countries were under attacked by the natural disaster. After Japan was attacked by the earthquake and tsunami, the next serious case was in Thailand -- which was being attacked by the flood. The flood was a threat to the Thailand’s economy because it had forced around 1000 of manufacture factories and estates to shut down. It is because the prime minister of Thailand thinks that it needs a few weeks to wait the water drain away in all the areas that had affected by flood. Hence, he got no choice and made a decision like this.

            Based on the Thai flood’s articles that I have read, by using my economic knowledge, there are several factors affecting the supply. It’s either to increase to decrease the supply of the country. One of the factors that change supply of a good is state of nature. Based on the Thai flood’s article, due to the heavy rain and followed by floods in Thailand for several months, lots of factories and estates was being shut down due to the manufacturer are unable to get the raw materials or get orders from people. From here, supply of the raw materials decreases and the supply curve move to the left. This is because the production was slowed down due to the shortage of raw materials in Thailand. From this flood we can see that Thailand was having shortage of getting raw materials to start the work. As a result of this, unemployment rate increases in Thailand, meaning the number of suppliers will be declined as well. Again, the supply curve moves to the left side. 

            Besides that, according to the article that I’d found, Thailand is also known as the world’s top supplier of IT accessories, especially hard disks. Due to the flood in Thailand, some factories had disrupted supplies to companies like Lenovo and Samsung, it had caused a declining the sales of their computers. Since computers are one of the modern technologies which people have to use it every day, it means the demand for computers keep increasing while the supply decreases. From here, we can see that Thailand was having shortage of getting computers. By using what I had learnt from economic, there will be an increase in demand which is mean the demand curve will shifts to the right .However, at the same time, the supply decreases and the curve will shifts to left.

Figure 3.1 : The demand and supply curve of IT accessories

From here, we also can see the price of some items like IT products has been increased. It’s because the demand of the IT products are very high but the supply of the IT products are low. A few examples of IT products’ price increased are hard disk, USB and computer parts. Price of item like hard disk was raised till 180%. In this problem, we can see the demand curve was remaining the same whereas the supply curve for the items moved to the left. We also know that Thailand was undergoing a shortage of items due to most of the manufacturers are unable to get their computer parts and the factories were being shut down for a moment.

            In addition, based on the article, we also can see the supply of some foods we decreasing. The main few crops are grains and wheat. The supply of both crops was decreasing. People were unable to plough their farm to plant their crops because of their farm has been destroyed. This has caused the crops were also having a shortage in Thailand. Hence, the price of veggie crops and grains were highly raised. The demand of the foods were never changed but increased. So from here we can know the demand curve shifts to the right while the supply curve shifts to the left. The demand curve shifts to the right shows that there is an increasing demand of foods while supply curve moves to left. This has indicated the production of food is decreasing. As a result, an increase in demand and a decrease in supply raise the equilibrium price .This means that the price of the food sold will raises due to the shortage of crops.

             Furthermore, according to the research done in Thailand, seven billionths human being to occupy the world will be born sometime this week. Unfortunately, flood still keeps happening in Thailand. One of the factors affecting the change in demand is population. The higher the population, the higher is the demand. This tells us that the demand for many goods will be increasing, but the supply of those goods will be declining.

            Additionally, elasticity can also be applied as well. Regarding to the production of rice crops affected in Thailand, price inelastic demand happens in this case. This is probably because every one of us needs to eat rice every day. So, they will surely buy food despite it costing more. So, from here, the perfectly inelastic demand curve shows vertical. However, on the other side of elasticity of supply, perfectly inelastic supply happens here in which the supply curve is vertical.  This situation happens was because the firms find it hard to change production in a given period of time. In Thailand, since there is flood happening around all the area in the country, the factories in Thailand are unable to produce more products. Because they have to produce in a short given of time, the firms were unable to change the production.

            Due to the floods in Thailand, countries like Japan also had been affected. Japan where the country producers’ cars like Toyota and Honda factories were also forced to shut down due to unable to supply car parts to the other plants around the world. Therefore, due to the factories were affected by the flood, the cars’ prices was increased due to the shortage of the car parts and the prices of the car parts were increased too.  

Reference Link :
1. http://thestar.com.my/columnists/story.asp?file=/2011/10/31/columnists/globaltrends/9804786
2. http://www.informationweek.com/storage/data-protection/hard-drive-prices-rise-due-to-thai-flood/232301534

Delivering an Effective and Efficient Transport System

            Based on the article “Delivering an Effective and Efficient Transport System” in the Business Times, we found most of the city or town in this country has a need to get very effective and efficient transport system urban public transport as the population of people in this country are growing every day. Especially in big city like Kuala Lumpur. The numbers of people use the public transport to travel around is increasing. Countries like New York, London, Tokyo and Singapore, they have a very fast and dependable urban public transport system. As for now Malaysia are heading towards to the road of becoming one of the high-income nations in the world, the Malaysia government realised that they must have a fast, reliable and comfortable urban public transport system instead of having those slow, unreliable and not-on-time public transport. There are a few reasons of why is there a needed the system of effective and efficient transport system.

As the population are growing, the demands for car s are also increasing too. Adults will have to drive to their working place and the students will have to drive to their college. When the cars on the road are increasing, there will always a heavy traffic jam in the rush hours such as during 7:00a.m. to 9:00a.m. early in the morning when everyone is going out to work and 5:00p.m. to 9:00p.m.which is when everyone is going back home after their job of the day is end. At this point, there will be an opportunity cost because people will have to sacrifice their dinner time with family or resting time because they might be stuck in the traffic jam for at least 1 hour (depends on how heavy is the traffic jam and area). Even though there are trains and buses as our daily transport, but people are still facing the same problem.  People who taking public transport have to take longer time than those who driving to their destination. As we move down along the PPF, we can see that the longer the time of people jam in the congestion then the shorter the time of people spend time with their family. This is one of the reasons why people will rather purchase a car to drive to their destination instead of taking public transport. So this has caused the car has increased very rapidly every year.

Since many people are having a hard time on jamming in the heavy traffic jam, some of the citizens decided to take public transport to work. So this has caused the demand for the KTM, LRT and buses in Malaysia have increased. But due to the not-on-time basis of the public transport, it had caused the demand of the cabs increases too. This has caused the price of the cabs increased because there are many people are willing to pay more to reach their destination when they are going too late to work or when there’s an urgent matter during the delay of public transport. For example in Singapore, there was a serious case about MRT system was down for 4 hours in December 2011. At that time, people who were in an urgent matter or not willing to waste their time on waiting the system recover will take bus and cabs to reach their destination. Cab drivers has took that opportunity to increase the price of the cab due to it’s an income opportunity for them. Smart people will always take the opportunity when the time is right. Although the prices of cab has increased, but people are still willing to take cabs when there are no choice for them to choose. So the price of the cabs is perfectly inelastic demand, especially for the poor people, because people are still willing to take cab although the price has increased up to 25% ~ 35% of the original prices. From here, there is a perfectly inelastic demand which the demand curve is vertical especially for the poor citizens. For poor citizens, they do not have any choice, because there are no any substitutes for cabs, and therefore, they will have to pay for it if they want to take a cab. However, for those citizens with higher income, there is a perfectly elastic demand in which the curve is horizontally. Even though the prices of cab already increased, they have other options instead of taking a cab.

In order to able to make the big cities such as Kuala Lumpur and other places are become liveable for work, leisure, entertainment and learning, an efficient urban public transport is very important key to make it happen. Malaysia government had done a lot of upgrades to make the public transport become better. A few of the new systems was being introduced to the Malaysians. A free city bus service was introduced in Malaysia by our prime minister, which is the Go-KL City Bus. Since most of the people and traffic jam in KL, he increased the buses to improve the mobility of access to public transport. A few new features will be installed in the buses. The new buses system is free and easy ride too. Another one is the all the trains are also undergoing a big upgrade. Rails of the trains are now having extension and expansion. So, numbers of KTM Komuter and LRT has been increased. MRT were also introduced in Malaysia.

From all these services, we can see that in future, the demand for transport will be increase since they are so convenience for all users. We also can see that the supply for these transportation are also increasing due to the increasing of the public transportations. The public transportation drivers are now also on demand. From here we can see the demand curve will be shift to right side because the quantity demand has increase since there are so many advantages on taking public transport. We also can say as the cars will be substitute into the public transport which is mean when people find there are more advantages in the public transport, people will substitute from driving by own into take public transport.

As a conclusion, the supply of public transport will be increase due to the demand are also increasing when the advantages of taking public transport has been given.