This document discusses how increased demand for guar from hydraulic fracturing (fracking) and poor growing conditions in India affect the market for guar. It finds that in the short-run, increased demand shifts the demand curve right, increasing the price (P1), while poor rains shift supply left, also increasing price (P2). In the long-run, guar production can expand to new regions, leading to a more elastic supply curve and moderate prices (P2) as the market reaches a new equilibrium (E2). Overall, fracking initially enriches guar farmers but prices fall as supply increases over time.
The poem highlights the fact that all human beings are essentially the same, regardless of their nationality or ethnicity. Through this presentation, I will delve deeper into this theme and explore its relevance in today's world.
James Kirkup's poem 'No Men Are Foreign' is a powerful statement about the universality of humanity. The poem emphasizes the fact that all human beings are connected by a common bond, and that we must learn to respect and appreciate each other, regardless of our differences. The poem is a call to action, urging us to embrace diversity and work together to build a better world.
The poem highlights the fact that all human beings are essentially the same, regardless of their nationality or ethnicity. Through this presentation, I will delve deeper into this theme and explore its relevance in today's world.
James Kirkup's poem 'No Men Are Foreign' is a powerful statement about the universality of humanity. The poem emphasizes the fact that all human beings are connected by a common bond, and that we must learn to respect and appreciate each other, regardless of our differences. The poem is a call to action, urging us to embrace diversity and work together to build a better world.
How Liberals and Conservatives Can Talk About Climate changeEd Dolan
Many liberals are afraid to talk to their conservative friends and neighbors about climate change. They think it is a waste of time and that all conservatives are climate deniers. Their conservative friends have similar feelings about liberals. Here is why liberals and conservatives should talk to each other about climate and how a constructive dialog is possible.
The Economics of a Price-Smoothing Oil TaxEd Dolan
An oil importing country can protect itself from the adverse effects of price volatility and encourage energy conservation by implementing a tax that varies inversely with the global oil price, thereby smoothing the domestic price.
Government agencies reported US GDP growth at a 3.6 percent in Q3. The economy added 203,000 jobs in November and unemployment fell to 7 percent, a new low for the recovery
US Adds 204,000 Jobs in October Despite ShutdownEd Dolan
The US added 204,000 new jobs in October. The unemployment rate edged up by less than a tenth of a percent. The data were muddled by the government shutdown
Breakup of the Ruble Area: Lessons for the EuroEd Dolan
After the Soviet Union was dissolved, the 15 successor states for a time shared the ruble as their common currency. The breakup of the ruble area holds lessons for the euro.
US Unemployment Rate falls to 7.5 percent in April; Job Gains Revised UpEd Dolan
The US unemployment rate fell to 7.5 percent in April, a new low for the recovery. Payroll jobs increased by 165,000 and job gains for earlier months were revised upward
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
How Liberals and Conservatives Can Talk About Climate changeEd Dolan
Many liberals are afraid to talk to their conservative friends and neighbors about climate change. They think it is a waste of time and that all conservatives are climate deniers. Their conservative friends have similar feelings about liberals. Here is why liberals and conservatives should talk to each other about climate and how a constructive dialog is possible.
The Economics of a Price-Smoothing Oil TaxEd Dolan
An oil importing country can protect itself from the adverse effects of price volatility and encourage energy conservation by implementing a tax that varies inversely with the global oil price, thereby smoothing the domestic price.
Government agencies reported US GDP growth at a 3.6 percent in Q3. The economy added 203,000 jobs in November and unemployment fell to 7 percent, a new low for the recovery
US Adds 204,000 Jobs in October Despite ShutdownEd Dolan
The US added 204,000 new jobs in October. The unemployment rate edged up by less than a tenth of a percent. The data were muddled by the government shutdown
Breakup of the Ruble Area: Lessons for the EuroEd Dolan
After the Soviet Union was dissolved, the 15 successor states for a time shared the ruble as their common currency. The breakup of the ruble area holds lessons for the euro.
US Unemployment Rate falls to 7.5 percent in April; Job Gains Revised UpEd Dolan
The US unemployment rate fell to 7.5 percent in April, a new low for the recovery. Payroll jobs increased by 165,000 and job gains for earlier months were revised upward
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
1. Free Slides from
Ed Dolan’s Econ Blog
http://dolanecon.blogspot.com/
Supply and Demand:
Will Fracking Enrich
India’s Guar Farmers?
July 30, 2012
Terms of Use: These slides are made available under Creative Commons License Attribution—
Share Alike 3.0 . You are free to use these slides as a resource for your economics classes
together with whatever textbook you are using. If you like the slides, you may also want to take a
look at my textbook, Introduction to Economics, from BVT Publishers.
2. What is Guar?
Guar is a small bean that is the
source of guar gum, a substance
that forms a gel when mixed with
water
Guar gum is widely used in foods
ranging from baked goods to ice
cream, which need to retain
moisture for maximum shelf life
More than 80 percent of the
world’s guar is produced in India
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
3. Fracking Sends Guar Prices Soaring
Guar is also used in hydraulic
fracturing (fracking), a method of
producing oil and gas
Increased use of fracking sent
guar prices soaring in early 2012
In the first half of the year guar
prices more than doubled as big
producers built up stockpiles to
guard against supply
interruptions
These events have people
asking, will fracking bring riches
Hydraulic Fracturing Operation, Texas
to India’s guar farmers?
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
4. Question: How Does the New Use Affect the Price?
How does fracking, the new use for guar,
affect the price?
Does the demand curve shift? If so,
show the new demand curve as D2
Does the supply curve shift? If so,
show the new supply curve as S2
Show the new equilibrium price as P1
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
5. Answer: How the New Use Affects Price
The new use of guar will shift the
demand curve to the right. The new
demand curve is shown here as D2
Nothing has affected the “other things
being equal” conditions behind the
supply curve, so the supply curve does
not shift
The market moves along the supply
curve until a new equilibrium price is
reached at the level P1
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
6. Short-Run Supply Effects: Growing Conditions
Guar supply, like that of any farm
product, is subject to changes in
growing conditions
In 2012, monsoon rains were late in the
parts of India that grow guar, causing
possible crop loss
Monsoon Season in India
Photo source: deeptrivia
http://commons.wikimedia.org/wiki/File:Ladakh_india_monsoon_clouds.jpg
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
7. Question: How Do Late Rains Affect the Price?
Other things being equal, how do poor
growing conditions (late rains)affect
the price?
Does the demand curve shift? If so,
show the new demand curve as D2
Does the supply curve shift? If so,
show the new supply curve as S2
Show the new equilibrium price as P2
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
8. Answer: How Late Rains Affect the Price
Poor growing conditions will cause the
supply curve to shift to the left, for
example, from S0 to S2 as shown here.
Other things being equal, growing
conditions will not affect the demand
curve
The market moves long the demand
curve until a new equilibrium price is
reached at the level P2
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
9. Short-Run vs. Long-Run Supply
In the short run, supply of guar is inelastic
because opportunities to expand
production is limited
In the long run suppy is more elastic
because guar can be substituted for other
crops, like cotton
Also, guar crops could be established
outside India in countries including
Australia, Argentina, and the United States
Cotton Ready for Harvest
Photo by Kimberley Vardeman
http://commons.wikimedia.org/wiki/File:Cotton_field_kv43.jpg
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
10. Question: Short-Run vs. Long-Run Market Adjustment
How do you expect long-run adjustment of
the guar market to differ from short-run
adjustment when there is a permanent
shift in demand? (Assume normal growing
conditions)
Draw a diagram that shows both short-run
and long-run supply curves
Show a rightward shift in the demand
curve
Show how the market first moves to a
short-run equilibrium E1 and then to long-
run equilibrium E2
What happens to the price over time? Cotton Ready for Harvest
Photo by Kimberley Vardeman
http://commons.wikimedia.org/wiki/File:Cotton_field_kv43.jpg
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
11. Answer: Short-Run vs. Long-Run Market Adjustment
In the short run, the shift in demand
causes the market to move along the
short-run supply curve SSR from E0 to E1
In the long-run, expansion of the crop to
new growing areas allow the market to
move to equilibrium E2 on the more elastic
long-run supply curve SLR
Over time, then, the shift in demand
causes the price first to rise sharply to P1,
and then to fall back partway to an
intermediate price like P2
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/
12. The Bottom Line
The bottom line? In the short-run, new
demand from fracking will bring
prosperity to India’s guar farmers
Over time, high prices will encourage
spread of the crop to new areas
The price will moderate. Farmers in
favorable growing areas will still earn
good profits, but not as high as the
short-run windfall profits they enjoyed
in 2012
P120730 published Aug 1, 2012 Ed Dolan’s Econ Blog http://dolanecon.blogspot.com/