4C Sharon Lam (16)
Jessica Lim (23)
Assignment:
News report
Newspaper used: South China Morning Post
Date of newspaper: 2nd December, 2003
Title: Seafood sellers call off strike
Description:
Aberdeen’s seafood market is famous in wholesale of seafood. The seafood sellers whom
sell seafood at markets or supermarkets import seafood from the wholesalers of the
seafood market at Aberdeen. Except seafood sellers, some restaurants will buy seafood
in order to make dishes for their customers and seafood lovers.
The seafood market in Aberdeen was said to be taken over by the government by the
reason of protecting public health. It is due to the discovery of cholera bacteria in fish
tanks there. While the government and the Fish Marketing Organization officials
went there in order to settle takeover arrangements, they discovered that the eighteen
operators refused to pay the rent to the government for twenty years!
So, the wholesalers at the fish market started their strike in order to protest about the
rent to the government is high and they could not afford it.
Explanation:
Seafood is natural resource.
Human wants are unlimited. We desire for goods and services. Resources are
used to satisfy our unlimited wants. Resources can be classified into 3 types;
they are natural resources, man-made resources and human resources. The
examples of natural resources are air, water and coal; and for man-made
resources are computers, televisions and cameras; for human resources, the
example is labour. Seafood is classified as natural resources.
Seafood is economic good but not a free good.
Wants are satisfied by the consumption of good and services, it can classify
into a good or a bad. A good is anything that can provide satisfaction or utility
to at least one person.
Seafood is classified as an economic good. Seafood is insufficient to satisfy all
our wants. More is preferred to less, people have to pay or give up something to get
it. Although when you catch the fish directly in the sea or rivers, it is free of
charge, it is not a free good as more fish is preferred. It is scarce and have a
production cost, for example, there is a production cost of the net and the boat to
get seafood.
Seafood is both consumer good and capital good in different situations.
A consumer good is a good produced for direct consumption. It gives utility
directly to consumers. Consumer goods can also be classified into consumer
durable goods and consumer non-durable goods. Consumer durable goods are
consumer goods that last over a period of time, for example, television set at home.
Consumer non-durable goods are consumer goods that are used up in a single
act, for example, tissue and mask.
Seafood is classified as consumer non-durable good when consumers buy
seafood directly from the seafood market at Aberdeen. It is because seafood buy
from fish market can provide direct satisfaction to the buyers of seafood.
Moreover, seafood cannot be reused. Seafood is used up after a single action. So,
it is a consumer non-durable good.
A capital good is a good that helps further production. They do not directly
satisfy human wants, for example, television set in school and machines in
factories.
Seafood is said to be a capital good in different situations as above. Let us take a
fish as an example. If the fish is brought by a chief in a restaurant, it is used to
make fish balls, then, it helps further production and does not provide utility to
the consumer directly. It will be a capital good then.
The basic economic units are firms and households. In the study of economics,
the Aberdeen’s seafood market acts as a firm and the buyers of seafood act as
households. (Ref. to Fig 1)
In the study of economics, firms are responsible for making consumption
decisions. They are the employers of factor services, an example of factor services
is labour. They are also the producer of goods and services; they sell goods and
services to the households.
According to the study of economics, the Aberdeen’s seafood market is a firm.
Although you might say, wholesalers at the seafood make cannot ‘produce’
seafood; however, wholesalers are the suppliers of seafood. They sell seafood to
customers, so, they have the right to control the amount of seafood supplied. They
are also responsible for making production decisions. They employ people from
households; they supply people seafood and services. They finally sell seafood
and their services to households.
In the study of economics, households are responsible for making consumption
decisions. They are the suppliers of factor services, and are the consumers of
goods and services. They buy goods and services from firms.
According to economics, the buyers of seafood act as households. They decide
which type of food they would like to choose and the amount of seafood they
would like to buy. They can work for the seafood market; they consume seafood
and services from the seafood market. They buy seafood from the Aberdeen’s
seafood market.
In addition, a person can perform both roles of firm and household. For example,
a person working at the seafood market and he also buy seafood there or buy
other goods from different places, he can both make production and consumption
decisions. He is the producer and consumer of goods and services. He is the
employer and supplier of factor services. He both sells and buys seafood at the
fish market.
Fig. 1
The Circular Flow of Economic Activities shows the money flow and real flow.
(Ref. to Fig 1)
We can see the real flow and the money flow in the Circular Flow of Economic
Activities. Real flow refers to the flow of goods and services. The Aberdeen’s
seafood market produces goods for the buyers of seafood to consume. The buyers
of seafood provides factor services needed in production to the Aberdeen’s seafood
market.
Money flow refers to the flow of money. In employment of factor services, the
Aberdeen’s seafood market pays the workers of the seafood market. Such
payment is called the cost of production which becomes the income of the workers.
The workers then spend the income on goods and services produced by the seafood
market or other firms. The money they spend is called expenditure which becomes
the revenue of the seafood market or other firms.
The strike of workers increases the price of seafood.
(Ref. to Fig.2)
Because of the strike of the seafood sellers at Aberdeen’s seafood market, the
supply of seafood decreases (S1→S2). It leads to an increase in the equilibrium
price (P1→P2) but a decrease in the equilibrium quantity transacted (Q1→Q2).
Fig.2
The demand of seafood decrease caused an increase in demand of fresh water
fish (淡水魚). (Ref. to Fig.3)
Fresh water fish and seafood are substitutes; substitutes are goods that can be
replaced by each other; for example, Pepsi and Coca-Cola.
Because of the strike of the sellers at Aberdeen’s seafood market, the price of
seafood increase. People will choose fresh water fish instead of seafood, so the
demand of fresh water fish will increase (D1→D2). It leads to an increase in both
equilibrium price (P1→P2) and equilibrium quantity transacted (Q1→Q2).
Fig.3
The demand of seafood decrease caused an increase in beef and pork.
(Ref. to Fig.4)
Beef and pork and seafood are substitutes. Because of the strike of the sellers at
Aberdeen’s seafood market, the price of seafood increase, people will change to eat
beef and pork. The demand of beef and pork will increase, (D1→D2). It leads to
an increase in both equilibrium price (P1→P2) and equilibrium quantity
transacted (Q1→Q2).
Fig.4
Conclusion:
From this case, the wholesalers at the fish market carried out a strike. The supply of
seafood decreases and supply curve shifts to the left. This will increase the price of
seafood. At the same time, because the prices of seafood increases, the demand of other
food, like fresh water fish, beef and pork will increase. The demand of these food
increases and the demand curve of these foods will shift to the right.
The end