Queensland+flood+costs+rise+as+assistance+grows-+Lauren

Title-Queensland flood costs rise as assistance grows Date-30/12/2010 Link-http://www.abc.net.au/rural/news/content/201012/s3103673.htm

Explanation- The Queensland Farmers Federation says the flooding has affected big export crops like grain, cane and cotton. This means that they can no longer produce to there full potential, due to lack of resources. This means that there will be a spike in fruit and vegetable prices. Also the flood has put roads underwater, so even if there were some crops, it would be near impossible to transport them. This means that the government doesn’t only need to provide money for the businesses, but also for infrastructure. In the graph below, it shows the maximum combination of goods and services that can be produced by an economy in a given time period, if all the resources are being used fully and efficiently and the state of technology is fixed. This is also known as potential output.

Vocabulary- · Factors of Production: The four resources that allow an economy to produce its output. These include land, labour, capital and management. · Macroeconomics: The area of economics that looks at the economy as a whole. Like measuring all the economic activity in an economy, inflation, unemployment, and the distribution of income in the whole economy. · Scarcity: Any good or service that has a price. · Infrastructure: Social overhead capital. This means the large-scale public systems, services and facilities of country that are necessary for economic activity (roads, railways, schools, hospitals ect.) · Production possibility curves (PPC): shows the maximum production of one good/ service against the maximum production level of the other good/service in an economy. It depicts the opportunity cost of each two goods/services. · Opportunity cost: The next best alternative forgone when an economic decision is made.

Graph-

Evaluation- In the graph you can see the PPC1 shifts to PPC 2, this means that factors of production has decreased and that the state are unable to produce to that amount anymore. There is nothing a government can really do to help after is prepare the people to start working to rebuild, creating a stronger labour force. The help of other states like New South Wales, Victoria, South Australia, Western Australia, Northern Territory, Tasmania and the capital Canberra sending in volunteers to help, and sending some machinery to help (capital) could also increase the speed of recovery and allow Queensland to be back to normal. This increase in labour will push PPC2 back to PPC1 because there will be increase in potential production and output, because Queensland will be able to produce more things.