Economics

ECONOMICS ASSIGNMENT

NAME: Stacey Turner

STUDENT ID: 17556105

UNIT NAME: Economics 100

TUTOR: Andrew Brannan

TUTORIAL DAY AND TIME: Tuesday 8am-9am

The Newspaper article in the US Times “Why there is no lime industry in America anymore“ discusses bad weather, diseases and crime which have hit Mexico and Florida imposing threats to limes being grown in the region. This is essentially destroying the lime trees as well as sending the price of limes up at a rapid rate.

In the 1940’ and 1950’s Florida started growing limes. In 1992 bad weather struck the crops and nearly wiped out all of Florida’s lime groves. This virtually destroyed all the planting of the industry. The US tried to rebuild the Florida groves but Mexico was quickly pushing them out of the market. Mexico who used much cheaper labor and land grew trees specifically for exporting to the US. Mexico took full advantage of the US being out of the market. In the year 2000 another disaster hit the Florida crops. A disease called citrus canker which caused the tree to die. An eradication program ordered that all of Florida’s crops be destroyed. The crops were not allowed to regrow for at least a few years, in turn completely pushing Florida out of the lime market for supplying to America. Mexico now supplies 97% of Americas’ limes and have quickly overtaken Florida in the supplying of limes. The problem now in 2014 for Americans is the dramatic increase in price of the limes even though they are being supplied by Mexico. The cause of this is said to be from bad weather, disease and crime. A standard 40-lb box of limes which would have cost a bar owner $20 is now costing $120.

The theory from the course that is relevant to this article is the theory of demand and supply.

A movement along the demand curve is caused by a change in quantity demanded.

The factor which changes the quantity demanded is price. When the price of a good or service decreases there is usually a movement...