INSTRUCTOR DISCUSSION NOTES:
How Do Steelmakers Spell Relief? I-N-C-R-E-A-S-E S-U-P-P-L-Y

1. What would the impact of the Indian government's restriction on exportation of ore? Draw a graph of supply and demand for steel in your answer.

This would increase the domestic supply of ore, allowing domestic steel producers to purchase more ore at cheaper prices. this would ultimately reduce the cost of steel.

2. What does the article say about the opportunity cost of not working in the mining industry?

The opportunity cost of not working in mining is increasing; this is what is causing workers to migrate from other industries to mining.

3. The mining firms are being forced to increase the amount of rail lines and locomotives to bring more iron ore to the steel firms. What does that activity itself do to the price of steel?

That in itself creates a circle of price increases; the need for more ore raises the price of steel. But the ability to get the ore to the steelmakers is based on getting more steel-based products.

Multiple Choice/True False Questions

1. According to the article, the price of iron ore is changing because
  1. Demand is rising faster than supply.
  2. Demand is falling faster than supply.
  3. Supply is rising faster than demand.
  4. Supply is falling faster than demand.
ANS . a

2. What does the article suggest will be the impact on the price of cars?
  1. Price of cars should increase.
  2. Price of cars should decrease.
  3. Price of cars should remain the same.
  4. Price of cars is not related to the price of iron ore.
ANS . a

3. What does the article suggest is happening to wages for mining labor?
  1. Wages are rising because demand for labor is rising.
  2. Wages are falling because demand for labor is falling.
  3. Wages are rising because demand for labor is falling.
  4. Wages are falling because demand for labor is rising.
ANS . a

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