Economic Essay Example | Topics and Well Written Essays - 1250 words - 1

Economic - Essay ExampleThis is shown in the future(a) come across Image dexterity Port Jackson Partners Limited, 2006 These top prices are backed up by a change in the weigh ore cost curve in current years. Following figure proves it. Image Courtesy Port Jackson Partners Limited, 2006 Australian Producers must take benefit of these high prices of iron ore and gather up for the mineral Since Australia is the low cost manufacturer of iron ore exported to China, the operating costs to mine the mineral and transporting the ore to the ports are also low. The substructure and iron ore mining procedures in Australia is world class which has been proved by their position on the cost curve (Port Jackson Partners Limited, 2006) in the following figure Image Courtesy Port Jackson Partners Limited, 2006 For the past few years western sandwich Australia has become one of the individual field to produce and export iron ore on a large scale. This has been possible due to the Chinese demand f or iron ore (Adams, (2004) Clements and Greig (1994) Clements et al. (1996) Layman (2004) and Ye (1998). The low cost of production has helped Australian manufacturers to be unambiguously placed to coax chances produced by quick Asian demand growth. On the other hand, reacting promptly to shifts in demand is lively to pulling in the break. Any collapse to react to the market increases the threat that other producer countries, pull up stakes set up low cost production installations in contest with Australia. The longer the postponement the larger will be the threat. If Western Australia is to increase its supply of iron ore and reap the benefits of growing profit accordingly it has to optimize its inputs. This can be achieved with the help of various combinations of its inputs. The following figure proves this Source Seattle education - appendage to chapter eight In the above figure isoquant Q1 is for 500 units, Q2 is for 475 units and Q3 is for 400 units. Australia can take ad vantage of this luck The production facility elaborations and capital investments demanded to meet this upsurge in demand are enormous. This will strike to be made in a much planned way and should be timely too. If Western Australia wants to hold on to its present contribution of sales, it will require committing in a further three hundred million deoxythymidine monophosphates of yearly production capacity over the subsequent 20 years. The kind of commitment indispensable to attain this capacity is considerable advances to existent port and rail installations in addition to expansion of untried mines and elaborations of existent mine sites. At a conventional standard cost of a$65 per tonne in capital expenses demanded for the extra capacity will amount to roughly a$20 gazillion in extra capital investments compulsory over the following 20 years (Port Jackson Partners Limited, 2006). optimisation of inputs M and L A firms production function represents the means by which the diametric resources of production can be combined to produce a particular quantity of output. In humanity the production function denotes the different combination of raw materials like land labor etc., to produce the uttermost quantity of output for a given period. The state of technology is assumed to be fixed (Rowles, 2011). let us now look at what happens when the inputs like Machinery (M) and labour (L) are optimized with the help of this figure foretell (Rowles, 2011). In the above figu