Heavy+economic+hit+from+'Australia's+Katrina'+-+Zelda

**Heavy economic hit from 'Australia's Katrina'**
>
 * CNN: http://edition.cnn.com/2011/BUSINESS/01/12/australia.economics.flood.katrina/index.html
 * January 12, 2011
 * The floods that have swept across Australia is affecting the country's economy. Brisbane, the third largest city in Australia, has worsened sharply with a potential of putting over 20,000 homes under water. Its tourist attractions have also been affected by this natural disaster. The estimated cost of this disaster could cost the country $13 billion for the physical and economic damage. The biggest economic impact this flood has on the country is its coal industry, as it was the buoy during the Great Recession. Because Australia is the world's largest supplier of coal, the floods caused world coal prices to increase. However, there is still hope in the country's economy as reconstruction will add to the total economic output.
 * Vocabulary:
 * cost of production: the total manufacturing cost of a product.
 * economic growth: a positive change in the level of production of goods and services by a country over a certain period of time.
 * commodity: a good for which there is demand, but which is supplied without qualitative differentiation across the market.
 * supplier: a company which supplies parts of services to another company
 * production: processes and methods employed in transformation of tangible inputs and intangible inputs into goods or services.
 * Due to a natural disaster, the PPC moves inwards, reflecting a reduction in an economy's total productive capacity. This is what Australia is able to produce while utilizing all of the resources available.
 * "If in two months you lose half your coal production, you can't really double production to make it up," Rothfield said. "Those mines were already working at full production." I think this statement is correct. The losses that the country has suffered caused by the floodwaters is devastating, however there is an optimistic way to look at the situation. Using coal as an example; because of the increase in cost of production, the supply curve shifts to the left, resulting in an increase in price and a decrease in quantity demanded. However, as coal is an inelastic good (as needed for steelmaking), the quantity demanded would not decrease as much, and total revenue would spark an increase instead. They say that reconstruction will add to the total economic output and I believe so, too. Even though the cost of production for the revival of the country's losses, tourist attractions and houses can be built to withstand future disasters, which could go a long way seeing as natural disasters are quite unexpected nowadays.