US+corn+reserves-+Damian

Article: http://finance.yahoo.com/news/US-corn-reserves-expected-to-apf-3038968207.html?x=0 Editor: Yahoo Friday April 8, 2011

Explanation: Rising demand for corn from ethanol producers is pushing U.S. reserves to the lowest point in 15 years, a trend that could lead to higher grain and food prices this year.

As the title of the article suggest, US corn reserves are reaching the lowest point in fifteen years. This is an example of a Buffer Stock scheme, where the government tries to control the price of an item by stocking and selling the item. Since corn is a public good, the government will try to keep the prices as low as possible so that it will be available to everyone in different classes. This is done by when the market is running low on corn, the government will release a portion of the corn in its reserve to try and counteract the increase in quantity demanded by supplying more and more corn. Since corn is a main ingredient in a lot of products in the world today, the smallest amount of increase in price will cause all other products to raise their price.

Vocabulary:
 * Development:** A process to improve the lives of people in a country (Qualitative)
 * Economic growth:** An increase in an economy's real level of output over time (Quantitive)
 * Consumer:** A person or organization that uses a commodity or service
 * Quantity demanded:** The quantity of a good or service that consumers are willing and able to purchase at a give price in a give time period.
 * Quantity Supplied:** The quantity of a good or service that producers are willing and able to produces at a give price in a give time period.
 * Determinants of Demand:** They are the non-price factors that determine demand for a product and lead to an actual shift of the demand curve to either the right or the left. Example includes income, substitute, taste, complement, etc.
 * Determinants of Supply**: They are the non-price factors that determine supply for a product. Examples includes Costs of production, technology, number of producers, substitute producer goods and government action.
 * GDP:** Gross Domestic Product- The total value of all final goods and services produced in an economy in a year.
 * Sustainable development:** Developing at a pace that will not destroy the environment for the future generation.
 * Buffer Stock Scheme:** is an attempt to use commodity storage for the purposes of stabilising prices in an entire economy or, more commonly, an individual (commodity) market.
 * Public goods**: A good that is nonrival and non-excludable.

Graphs: Hand drawn

Evaluation: I think it is only logical for the US to dump its corn reserves to lower the price so that everyone can at least eat corn to suppress their hunger. Also, we cannot ignore the dangers if the US did not limit surge in price. If the price of corn raises tremendously, then a lot a products will also see an increase in price because corn as an ingredient is so important in so many products. This real life example shows that the Buffer Stock Scheme actually is a very good way for the government to control prices in the market. This will be beneficial to the consumers as this will lower the price and allow consumers to buy more corn at a cheap price.