Chapter 2 Media Article

"House prices still rising", Calgary Sun November 3, 2006


This articles states that even though new listings are flooding the residential realty market the average combined residential sale price is still reaching a record of $374 067. Even though the sales activity is easing across the city (Calgary). There was a 4,257 new listing in October, marking a 51% increase from the same month of 2005 and a 11% jump from September. Home sales have dropped 2.7% to 2,122 from September to October. The overall average combined sale price, which includes houses, condos, and mobile homes, rose 1.1% from the previous month and 46.9% from October 2005. Single-family dwelling carried an average price of $413,712 in October, up from $284 206 a year ago. A typical condo cost $283,888, an increase from $187,661 during the same month of 2005. Also Canada Mortgage and Housing Corp. released an outlook, which states that sales of existing homes across Alberta will see a record for the seventh consecutive year in 2006 before dropping slightly the following year.

Relationship to Chapter 2 - Supply and Demand

There are several factors that affect supply. The higher the price that a supplier can receive for their product the more willing they are to produce for the market. Obviously the supplier feels that it is more worthwhile to supply something that is worth a lot more than something that is worth less. As the market for housing continue to rise more and more people are going into that industry, meaning that even more houses are being built. Increases in housing available doesnt necessarily mean that more houses are being built, but also people selling their own house to make a profit. The price is not the only thing that causes an increase in supplies. Technological change can influence the supply as well. As more and more high tech equipment is introduced into the workplace production will be faster. The demand for housing is still high, and even though there are new houses being built the supply is still relatively fixed. Since the production is a slow process the supply can not keep up with the high demand, so therefore prices continue to rise. Unless the demand goes down the price will continue to rise. With the price rising at such a quick rate, it makes you think when it will ever stop. Eventually there has to be a limit to how much a price of a house can rise up to, but the most important question is when will it happen. Even though a house is a necessity, there is a limit to how much someone is willing to pay. If prices continue to rise like this I don't think people in my generation will be able to afford any houses.

Chapter 1 Media Article

"Growing wheat scarcity may send prices skyrocketing", Business Report October 31, 2006

This article informs us of the growing scarcity of wheat in the world. The growing price of wheat will be the highest in the next six months, and threatening to spur inflation in China and India. One of the main reasons for the shortages in wheat is due to the droughts in Australia, Ukraine, and the United States. If the situation continues on, prices may jump 47 percent more to $7.50 (R56) a bushel on Chicago futures markets. Egypt, the world's biggest wheat importer, bought 180 000 tons for $34.4 million, triple what it had initially sought. A state-run grain trading company in India said it wants to buy an extra 35 000 tons after already buying 6.5 million tons this year. The world inventory would fall 43 percent by June to 119.3 million tons, the lowest since 1982. Higher wheat prices will cause economic hardship for some countries, meaning that bread and cereal prices will go up.


Relationship to chapter 1 - Resource (land), Scarcity

Since wheat is the world's most planted crop and also one of the most widely used crop, it is no surprise that the shortage will have tremendous effects. Droughts have devastating effect on the crop, but the problem with land also has a large impact as well. There is only so much land to be used for farming, and with the expansion of human population into areas with fertile soil, which contributes to the growing scarcity of wheat. Not only does limited amount of land affect the scarcity of wheat put also the ever growing population of the world. The production of wheat cannot keep up with the growing demand of wheat from the world population. As time passes, the world population may just be too overwhelming and causing the price of wheat to rise even more. The rise in wheat prices isn't necessarily a bad thing for everyone; farmers are just some people that profit from times like these. As long as they continue to produce the same amount as they do now, they will earn a higher profit with the same amount of crops. This may give farmers the motivation to produce more crops during these times to earn more profit, eventually stabilizing the supply of wheat again. What will happen one day when there isn't enough supplies of wheat for everyone? There isn't really any substitute for wheat and many people depend on wheat as part of their diet. Unless we develop new growing techniques to produce more crops on less amount of land or to manage the supply of wheat more efficiently, we will always have this problem on our hands.