CONTENT PAGE

Page

1. Introduction 3

2. Discussion

2.1 Article 1 – PPF 4

2.2 Article 2 – Demand and Supply 5

2.3 Article 3 – Market Equilibrium 6

2.4 Article 4 – Inelastic Demand 7

2.5 Article 5 – Price Change 8

3. Conclusion 9

4. References 9

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1. Introduction

Economics is a social science connected with the production, distribution, and

consumption of goods and services. It is divided into two parts; microeconomics and
macroeconomics. Microeconomics is the major of studying about economics activities. It
focuses on behaviors of firms and customers while making decisions and how they interact in
a specific market, sometimes with influences from government and the impact on society.
This Assignment contains newspaper articles and analysis which are related with
individual issues and microeconomics concepts.
There are five topics included in this assignment which are Production
Possibility Frontier (PPF), Demand and Supply, Market Equilibrium, Inelastic Demand and
Price change.

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2. Discussion

2.1 Article 1

Article title; Coronavirus: Global container shipments set to fall 30% in next few months
Article URL; https://www.straitstimes.com/business/economy/coronavirus-global-container-
shipments-set-to-fall-30-in-next-few-months

Microeconomics concept discussed: Production Possibility Frontier (PPF)

Summary: According to International Chamber of shipping Chairman ESBEN POULSSON,

shipments have probably fallen about 15 per cent in this year amid the coronavirus pandemic.
That’s why warehouses are getting so full of goods and retailers are asking shipping
companies to push back deliveries which may drag global container shipments down as much
as 30 % in the next few months.

Analysis: The coronavirus pandemic causes the reduction of global container shipments. So
that can be recognized as the destruction of capital and this can cause the production
possibility frontier (PPF) to the shift inwards meaning from B to A. However, if the
technology and the prevention of coronavirus pandemic can improve, it will cause the PPF to
shift outwards which means from B to C.

Container shipments PPF

A B C

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2.2 Article 2

Article title; Indonesia to ban air, sea travel to early June over COVID-19

Article URL; https://www.channelnewsasia.com/news/asia/indonesia-ban-domestic-air-

sea-travel-june-coronavirus-covid-19-12671136

Microeconomics concept discussed: Demand and Supply

Summary: To prevent further spread of coronavirus, Indonesia temporarily ban domestic and
international air and sea travel. The ban on air travel will be in place until 1 st June and the ban
on sea travel will be in place until 8th June.

Analysis: We assume that the demand curves are downward slopping based on the Law of
Demand. Since there was a coronavirus crisis, thousands of people in Indonesia have greater
demand in air and sea travel tickets and the article say nothing about changing price in air and
sea travel tickets. Thus, there will be a rightward shifted from D1 to D2. The Price P1
remains the same for the demand curve D2.

D1 D2

P1

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2.3 Article 3

Article title; US oil prices plunge below zero for first time in history
Article URL; https://www.straitstimes.com/business/companies-markets/us-oil-prices-
plunge-below-zero-in-devastating-day-for-global-industry

Microeconomics concept discussed: Market Equilibrium

Summary: Demand for oil has crumbled because of the coronavirus crisis. Therefore, US oil
prices fell below zero for the first time in history.
Analysis: Due to the coronavirus crisis, demand for oil in US has decreased. This causes the
demand curve for oil shift leftward from D2 to D1. At the original price P1, quantity
demanded lower quantity supplied and result in surplus, therefore it downwards from P2 to
P1until the surplus is eliminated create a new equilibrium.

Price of oil

P2
D1 D2

P1

Q1 Q2 Quantity of oil

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2.4 Article 4

Article title: Netflix posts explosive growth during global coronavirus pandemic

Article URL: https://www.scmp.com/tech/apps-social/article/3080980/netflix-posts-

explosive-growth-during-global-coronavirus-pandemic

Microeconomics concept discussed: Inelastic Demand

Summary: During the coronavirus crisis, streaming giant Netflix added a record 15.8 million
paid subscribers and 7.5 million new subscribers. But the company’s executives warned
investors not to get too excited.
% ∈Quantity Demanded 7.5
Analysis: PED = = = 0.475
% ∈Price 15.8
PED < 1. This means the percentage of changes in quantity demand is smaller than the
percentage of changes in price. The customers are not very responsive to the changes and it is
called inelastic demand. The elastic demand curve shifted from P1 to P2, Q1 to Q2 will cause
the revenue to increase.

Price

P1

P2

Q1 Q2 Quantity Demanded

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 2.5 Article 5

Article title: Heineken beer sales slide amid lockdowns, worse to come

Article URL: https://www.thejakartapost.com/news/2020/04/22/heineken-beer-sales-

slide-amid-lockdowns-worse-to-come.html

Microeconomics concept discussed: Price change

Summary: Because of the COVID-19 pandemic, pubs and restaurants across the globe are
closed. That’s why the world’s second largest brewer, Heineken. Reported 14% slide in beer
sales in March, with sharp declines in all regions.

Analysis: According to the Law of the Demand, when the price of the beers are decreased,
the quantity demanded for beers will rise.

Price Increase in demand for Price Demand for others

beers

P1
P1
D2

P2
D1

Q1 Q2 Q2 Q1 Quantity
Quantity

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3. Conclusion:

Through the content above, I have learned how the concepts of Microeconomics
related with economics in daily life. Economics is a social science that deals with the
lifecycle of goods and services. In conclusion, market is very diversity, the movement of
price, demand and supply have huge effect on the others but sometimes it doesn’t change any
factors.

4.References:

1. Article title; Coronavirus: Global container shipments set to fall 30% in next few months
Article URL; https://www.straitstimes.com/business/economy/coronavirus-global-
container-shipments-set-to-fall-30-in-next-few-months

2. Article title; Indonesia to ban air, sea travel to early June over COVID-19
Article URL; https://www.channelnewsasia.com/news/asia/indonesia-ban-domestic-air-
sea-travel-june-coronavirus-covid-19-12671136

3. Article title; US oil prices below zero for first time in history
Article URL; https://www.straitstimes.com/business/companies-markets/us-oil-prices-
plunge-below-zero-in-devastating-day-for-global-industry

4. Article title; Netflix posts explosive growth during global coronavirus pandemic
Article URL; https://www.scmp.com/tech/apps-social/article/3080980/netflix-posts-
explosive-growth-during-global-coronavirus-pandemic

5. Article title; Heineken beer sales amid lockdowns, worse to come

Article URL; https://www.thejakartapost.com/news/2020/04/22/heineken-beer-sales-slide-
amid-lockdowns-worse-to-come.html

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