Essay #3

1.       a) Demand is the quantity of a good (or service) that consumers can and want to purchase in a given time and given price. So for example a store may buy 5 chairs at 6 dollars each in one day, we can say that the demand for chairs at a price of 6 dollars is 5 chairs per day

b) Economic growth is the increase in the amount of goods (or services) compared from one period of time to another.

 2.   The demand and supply curve increased because China had demanded a lot of cooper which made the price increase up to $8,009.75 in August 2008. Higher quantity of copper is demanded at each price, the demand curve shifts to the right because of this. It will eventually get to equilibrium. There is an excess of demand because the demand curve shifted to the right.

3.       In this case the supply curve had shifted to the left. Lower quantity is demanded for the new washing machines because it is expensive due to the fact that cooper used in the wiring is expensive. The supply shifts in and less quantity is supplied at each price. The washer machines are more expensive and have a decrease in its demand. 

 4. There might be many possibilities for what is likely to happen in the copper market in the coming months.  When it says ‘cooper demand was likely to fall because so many construction projects, which use large amounts of cooper wiring were now finished’, this proves that the demand for copper will decrease, it won’t decrease too much but it will decrease a bit.  Since the projects in where they used cooper for wiring were not finished, there isn’t as much demand as before, so the demand and the supply curve may decrease too. Because there is less quantity demanded at each price. 

‘Moreover preparations for the Shanghai Expo have been keeping copper prices have up since last summer. When the pavilions open their doors in three weeks’ time, buildings have stopped and with it the significant demand for copper will also fall. Indeed after the expo closes at the end of October, the market could be swamped with recycled metal’ this leads to a shift on the left of the demand curve and the same supply curve, however it will also lead to and excess in supply due to the recycled metal.  There will be a fall in the demand curve for cooper.

‘setback when copper traders said that it may be about to fall steeply again’ this is also evidence that the demand curve will shift to the left.

We say that the demand for cooper won’t decrease as much because there are other factors such as new washing machines, fridges and other products that need copper, and those should help to keep the price up.