Economics IB Practice IA

Ivory Coast and Ghana account for over half of the world’s cocoa production used in making chocolate. So far this year, the supplies of cocoa have been plentiful, but you wouldn’t know that by looking at the recent price of cocoa on the futures market. Over the past week, it’s become the top performer with the Standard and Poor’s GSCI Cocoa index gaining 8. 86 percent over the past five trading days. The answer to cocoa’s dramatic price gains can be found in those countries that border the Ivory Coast, namely Liberia and Guinea, along with Sierra Leone, where the deadly Ebola virus has killed roughly 2,300 people.

Although Ebola has not yet been found in the Ivory Coast or its neighbor Ghana, health experts believe it’s just a matter of time before the virus spreads to the world’s largest cocoa producer. Cocoa supplier’s fear that an outbreak of Ebola in the Ivory Coast would shut down all trading along with any cross border movement. So far, it appears that cocoa flows have not been affected, however, isolated reports indicate that some shipworkers have refused to dock at the Ivory Coast’s San Pedro port.

With a potential cocoa shortages on the horizon, the price has spiked higher as suppliers have become more reluctant to let go of their inventory. Should the price of cocoa continue to rise, this year’s holiday indulgences that include chocolate may take a bigger bite out of your holiday budget. Also on the rise this week has been unleaded gasoline futures. After having declined over 19 percent since its June 24 high, the S&P GSCI Unleaded Gasoline index appears to be in a dead cat bounce, gaining 0. 50 percent over the past five trading days.

Based on its price history going back to November of 2011, unleaded gasoline prices have fallen back to support at the lower edge of its recent trading range. If prices continue lower from here, they could fall another 20 percent, down to prices seen during August 2011. Laif Meidell, CMT, is the president of American Wealth Management, a Reno-based Registered Investment Advisor, and is a subadviser to the AdvisorShares Meidell Tactical Advantage ETF (ticker: MATH), an SEC-registered fund, and can be reached at 775-332-7000 or [email protected].

Securities offered through Foothill Securities Inc. , member FINRA/SIPC. American Wealth Management is a separate entity from Foothill Securities. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate. Website: http://www. rgj. com/story/news/2014/09/23/laif-meidell-ebola-fears-bump-cocoa-futures/16088133/ … 07. 10. 2014 Ebola Effecting the Economy of Cocoa Cocoa has a high demand in Europe, due to its use in chocolate.

This good, though, is being affected by the disease “Ebola”, which has been going around in mostly in Southern countries, especially at the Ivory Coast, where the Cocoa plantations are situated Ebola is a deadly virus, which has already killed roughly 2,300 people in only Liberia, Guinea, along with Sierra Leone. This high death rate, is also affecting the people, that work at the plantation, because the number of workers decrease. This causes the supply curve to shift to the left. Shift In Supply Curve:

This diagram shows, that due to the fewer workers, being able to work on the plantation, The price rises from P1 to P2 and thus the quantity demanded decreases from Q1 to Q2. The demand curve, though, was not affected yet. Not only the number of workers has decreased, but also the government closed the border, so that the disease doesn’t spread to other parts of the world. Also the shipping company that ships the Cocoa from the Ivory Coast, to Europe and other parts of the world, are not shipping this good, because they fear that they might get infected by the deadly virus.

This causes again a negative shift of the supply curve to the left. Shift in Supply Curve: Because the trading company refuses to dock, the price rises again from new P1 to new P2. And again the Quantity demanded is affected too and Decreases from Q1 to Q2 Modern society, though, has a lot of events, where chocolate is a common present, such as Valentines Day, birthdays, and also anniversaries. This will cause an outwards shift of the demand curve, which is a positive aspect for the supplier, because they get more money, for the same amount of goods being sold, as illustrated in the diagram below. Shift in Demand Curve:

This shift of the demand curve, increased the price from P1 to P2 which increased the quantity demanded from Q1 to Q2, but the price is still relatively higher than the demand of this good. A solution for this problem, would be to buy the Cocoa from another country, such as brazil, because it has not yet been affected by the Ebola disease and there for there will be not problems with the transportation nor with the amount of worker, that help to collect this good from the planting. This way the curve would not change at all, except if the quality of this good is low and less people want to buy it.

Ebola is an incredibly dangerous disease that has been sweeping West Africa recently, hitting mainly in Liberia and Guinea. Ebola seems to be affecting trade from West Africa to the US seeing as how it states in the article “Cocoa …

Did you know that there are many crucial details that are left out of our biology text book that we do not know anything about? Some details like Ebola we hear about but we do not know what it is …

Kit Kat started in August 29 in 1935 in York by Rowntree, in 1973 Kit Kat entered in Japan market. In 1988, Nestle took over the Kit Kat ( Kit Kat, 2014). Today, Kit Kat is very successful in Japan, …

Kit Kat started in August 29 in 1935 in York by Rowntree, in 1973 Kit Kat entered in Japan market. In 1988, Nestle took over the Kit Kat ( Kit Kat, 2014). Today, Kit Kat is very successful in Japan, …

David from Healtheappointments:

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out