An Economic Analysis Of Demand, Supply, Prices And Elasticities.

An Economic Analysis Of Demand, Supply, Prices And Elasticities.

On the 10th of March 2011 Japan was hit by a massive earthquake ( measuring 8.9 on the Richter scale which lead to a tsunami of huge proportions. This has lead to most of the country being destroyed which has lead to major social chaos as well as a near collapse of the world’s 3rd largest economy. This disaster will cost Japan billions dollars which will further weaken Japans shattered economy. ( Reuters:2011). This spending will put huge pressures on the economy in terms of GNP (Gross National Product).
Gross National Product is defined as an increase in the volume of goods and services produced in a given year. ( Dunnett;1993; pg 181). The Graph below depicts the movement of the Japanese economy as well as the expected decrease due to the natural disaster that has occurred.

(Stats taken from: https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html; 2011).
The graph above indicates Japn’s GDP growth from 2008-2010. This graph also demonstrates the expected GDP loss due as a result of the Earthquake. The impact of the Earthquake is expected to cause a 5-6% decrease in Japans GDP (Reuters;2011). This will have a negative impact on Japan’s economic growth as well as the various industries.
It has been reported that major car industries such as Toyota, Honda, Mazda and Nissan have shut to down major production facilities. The interruption in parts production could mean that there could possibly be a slow output at Japanese-owned auto factories in other parts of the world. An industry analyst stated that the quake’s impact would be “manageable.” Toyota reported that they would have to suspend operations as a result from the quake. Furthermore Toyota stated that all factories up north have been shut down as a result of the earthquake. It has also been reported that this will have a negative impact on Japans economy because Japan is a major exporter of these goods throughout the world and these exports contribute to Japans economy...