Demand for Sugar

Here is an article which shows the rising prices of sugar due to market pressures.S-grade sugar rose by Rs 5 a quintal and M-grade by Rs 10 in the spot market, extending last week's gains, on higher demand.

Read this article

ttp://www.thehindubusinessline.com/markets/commodities/article2546346.ece

Answer the following questions

What is demand?

Why do you think the price of sugar is going up in the market?

How will you show this phenomenon with the help of a diagram.

Apart from the factors mentioned in the article, are there other factors which might affect price of sugar. Comment.

Should government intervene ? Discuss price control measures.

Negative Externality

A recent report show that nitrogen pollution from farms, vehicles, industry and waste treatment costs the EU up to £280bn (320bn euros) a year. It contributes to air pollution, fuels climate change and is estimated to shorten the life of the average resident by six months. Livestock farming is one of the biggest contributors of nitrogen pollution and less meat eating could have a significant effect on the levels of emission. The report calls for greater controls on the methods of farming and the use of farming equipment.

Tasks: Nitrogen pollution is an example of a negative externality.

a. Can you illustrate the impact on price, output and social welfare of a negative externality?

b. What do you think is the best way to intervene and reduce negative externalities?

http://www.bbc.co.uk/news/science-environment-13025304

http://www.businessgreen.com/bg/news/2042506/nitrogen-pollution-costs-europe-gbp280bn