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| 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.
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| 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
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