1. Topic selection
The factors of demand and supply are two most important factors in economics. The resources that are available in a country, their demand as well as supply are important for any country. Thus, the topic selected for the report is “demand and supply of certain resources in Australia” as this is one of the recent news articles in the country. Demand can be explained as the quantity that is desired by consumers for purchasing. The concept of supply can be explained as the quantity of commodities available in the marketplace for consumption of purchasers. The main factor affecting the demand and supply of any commodity is price. However, there are certain factors that also affect demand and supply. All the factors affecting the demand and supply of resources in Australia will be discussed in the report in details.
2. Evaluation of the article using Economic Concepts
The issue of demand and supply of certain resources in Australia is one of the major economic issues in the country. There are various resources in Australia such as mining resources, agricultural resources and human resources. However, the differences between the demand and supply of these resources are huge. The demand of these resources in the Australian market is huge but the supply of the resources is not of the same level. Among the agricultural resources, the demand and supply do not face much difference (Lane et al., 2014). The other two resources, the human resources and mining resources have much difference in their demand and supply. This difference mainly occurs due to the existence of exogenous factors of the Australian economy.
It has been seen that all the energy resources and agricultural resources of Australia have greatly participated in the GDP and income of the country. These resources have helped the country to improve its economic growth and establish its economic stability (Sheehan and Gregory, 2013). Thus, it can be seen that the government has key interest in the demand and supply of these resources in the country. The government’s interest lies as these resources have great contribution towards the GDP of the country as well as the economic growth of the country. In addition, interest of the demand and supply of certain resources in Australian also involves the businesspersons and traders in the country. This is because the income and business growth of different companies in Australia depend on the demand and supply of certain resources and the difference that exists between the demand and supply. For example, business concerns get automatically affected if the demand of human resources is high but the supply of the same is unavailable.
The economic concept and theory of demand and supply is one the fundamental principles that govern a country. Attainment of the equilibrium position is one of the major objectives of a country. The balance that exists in the demand and supply is referred to as the equilibrium position (Rios et al., 2013). However, the Australian economy does not face equilibrium in the case of certain resources. The theory of demand and supply states the imbalance between demand and supply occurs mainly due to the price factor of a product. The imbalance in demand and supply also occur due to certain other exogenous factors According to the research and studies done on agricultural resources, the difference between the demand and supply of agricultural resources in Australia are not much.
However, it can be seen that the mining resources of Australia, that is the Gas market of Eastern Australia faces an asymmetry in the demand and supply. The international market pressure resulted in low demand of the mining resources of Australia during the 1990s. However, the development of export has resulted in the growth of demand of the mining resources in Australia. However, due to external reasons, the supply of the mining resources was negligible. This can be analyzed better with the case of Bowen Surat fields of gas in Australia (Moryadee et al., 2014). Supply of mining resources, especially gas, was negligible during the last twelve years in Australia. This was yet another reason for the difference in demand and supply of mining resources in Australia.
Another difference in the demand and supply can be noticed in the human resources of Australia. This difference is completely in lieu with the theory of demand and supply. As stated in the theory, when the demand for resources is huge while the supply is limited, the price of the services increases. The same happened in the case of Australian labor market. The supply of skilled labors in Australia was limited but the demand of skilled labor was huge. This resulted in great hike in the wages of human resources of Australia. However, the issue of the imbalance of demand and supply of human resources was not overcome (Hohenstein et al., 2014).
According to the analysis that has been done, it is suggested to the key players to properly allocate its human resources and seek out for new sources to acquire skilled labor for meeting the increasing demand of skilled labors in Australia. The demand of skilled labors can also be fulfilled with the help of providing proper training of the unskilled labors present in the Australian marketplace.
Another recommendation for solving the issue of mining resources and supply of gas in Australia can be solved with the help of identification of proper technologies for increasing the supply. The production status and the trends of the sources of supply should be critically analyzed. Key players should analyze the actual constraints of the issue that are beyond geologic, economic, political and technologic issues. They should also conduct various researches for developing new ideas for meeting the increasing demand.
According to the analysis done on demand and supply of certain resources in Australia, it can be concluded that the demand and supply of resources in Australia does not depend on the level of price of the resources, but also on other factors that include both exogenous and endogenous factors.
3. Presentation of the issue in the form of diagrams
Table 1: Table showing the trends of supply of mineral resources in Australia
(Source: Moryadee et al., 2014)
Table 2: Graphs indicating the demand and supply of low skilled and high skilled labors in Australia
(Source: Hohenstein et al., 2014)