This week’s group discussion and questions are based on the same article from last week, “Supply Chains, Safety Protocols Hobble U.S. Factories” by Austen Hufford Bob Tita, published on June 4, 2020, in the Wall Street Journal. https://www.wsj.com/articles/supply-chains-safety-protocols-hobble-u-s-factories-11591263001
(Links to an external site.)
Re-read the article, if necessary, and then respond in this discussion with your answer to the following questions for your initial prompt, which is due before class begins on Wednesday.
The article states: “General Motors Co. last month delayed plans to increase the production of pickup trucks because of a shortage of parts from Mexico.” What is a shortage? What caused the shortage of pickup truck parts? If the shortage of parts persists, how will the price of pickup truck parts be affected?
After posting your answer to the above questions, use this discussion to work with your group on the following questions. Your final responses to these questions must be submitted to Ch3 P2 Group Submission.
Explain how productive efficiency is achieved. Explain how allocative efficiency is achieved. How are these connected? Is the U.S. currently able to achieve either of these levels of efficiency? Use the article to show evidence to support your answer and provide an economic explanation.
Assume that the price of pickup truck parts to produce pickup trucks rises. Identify the panel for the graph that represents the change in the pickup truck market due to the increase in the price of pickup truck parts. Why did you choose this panel to represent the change in the market?
Answer the following questions analyzing what is occurring in the market graph you chose in question 3. (Note: these are similar questions to the ones you will answer in your article analysis essay.)
Is there a rightward or leftward shift of the demand or supply curve?
Explain the shortage or surplus that is caused by the change in the market.
What will happen to the market equilibrium? That is,
Will the price need to rise or fall to achieve the new market equilibrium?
Will the quantity need to increase or decrease to achieve the new market equilibrium?
Will there be a movement along the demand and/or supply curve to achieve the new market equilibrium? Explain how and why. For more information on Market Efficiency & Equilibrium read this https://en.wikipedia.org/wiki/Efficient-market_hypothesis
The post Market Efficiency & Equilibrium appeared first on Australia Assessments.