Transcript 1 st runner up

Economics Project:
Demand & Supply,
Resources Allocation,
International Trade
and Finance
Group Members:
Chau On Ting
Tsang Yin Fong,
Flora
Chau Sing Lung
P.S. press the buttons for explanations.
Event to be elaborated:
The Arrival of the Real Madrid.
News abstract
Hong Kong, July 30, 2003 –
The Hong Kong Football Association (HKFA) today announced
that tickets for the eagerly-awaited Real Madrid match will go
on sale to the public from Thursday July 31 at 9pm at the Hong
Kong Stadium. Eager fans began queuing outside the stadium
on Monday, and demand for tickets is expected to be high.
Why did people queue up?
Fixed no. of seat
in the stadium??
Price of tickets are set
below the equilibrium??
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PE
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P.S. see explanations here!
Excess Demand
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Q
Since the no of seat of the stadium is fixed, the supply of the
tickets are hence perfectly inelastic. (i.e. a vertical supply curve.)
P
S
A black
market MAY
be created!
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Excess demand
D
Q
The price of the tickets is set below equilibrium. The
Quantity supplied is less than the quantity demanded.
Excess demand arises. So, queues appeared.
News Abstract:
(From 9th Aug. Ming Pao “Editorial Creative Soccer Business”)
REAL MADRID has raised a whirlwind here.
Tickets for their match were instantly snapped
up and have been resold at huge profits.
Fans have flocked to see their stars.
P
S
Even though the price is
higher than the normal one,
it cannot be set infinitely. It has
to be accepted by the buyers.
Or no one will buy the tickets.
PE
(The black market
is cleared at this
price.)
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P
D
Excess demand
Q
Resources Allocation
Beckham
23
What to Produce??
How to Produce??
For Whom to Produce??
P.S. Press the bubbles for explanations.
What to Produce?
During this wonderful event, many Beckham’s fans dashed
for his “football shirts” (no. 23). This caused the demand
of the shirts to increase. The price and quantity transacted
of the shirts therefore increased.
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As the demand for the “football shirt” (no.23) increased,
more resources will be put into the production of the
sports shirts.
The market price of the shirts serve as a signal to guide the
producers on what goods and what quantities to produce.
How to Produce?
In order to reduce costs, producers (Adidas)
will produce the shirts in the mainland China,
Malaysia, Indonesia, etc. and transport them
back to the HK market to sell.
Products to be sold in
Hong Kong market.
Transporting to the main market.
Factory in the mainland
Labor employed in the mainland.
For Whom to Produce?
For the Rich?
For the
elderly?
For the Youth?
For the
poor?
The answer is: in a market
economy like Hong Kong,
goods are distributed
to those who are willing
and able to pay for the price.
International Trade
and Finance
Since the shirts are
produced in different
countries (China,
Malaysia and
Indonesia),
we are going to look
at something
about the conversion
of different
currencies.
Due to the arrival
of the super
football stars,
fans from all over
the world come to
HK to catch a
glimpse of their
idols. Businesses
( the service
sector) were
done!
International Trade
and Finance
Airport Service
Fans from all over
the world come to
HK. This stimulates
the businesses
of the local service
sector.(increases the
demand for it) This
increases the export
of service of HK!
Food and Catering
Hostelry
International Trade
and Finance
To Hong Kong, the shirts are treated as imports. It is mentioned
that the demand for the sports shirts (no.23) increased rapidly,
in another words, producers need to pay more (in terms of
foreign currencies) for the imports in order to meet the
increasing demand. Hence, the demand for foreign currencies
increased.
P
Shirts are imported
from China, Malaysia
and Indonesia.
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D1
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International Trade
and Finance
Producers need more foreign currencies to settle the
payments of the imported sports shirts. Hence, the
demand of foreign currencies increased. (e.g. RMB is said
to be appreciated.)
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End of the
presentation