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Japan Faces a Rice Crisis as Price Nearly Doubles for Food Staple

EconEye Admin

The price of rice in Japan has nearly doubled over the past year due to a poor rice harvest, wheat shortages caused by the Russia-Ukraine war leading consumers to substitute rice for wheat, and a booming tourism sector.–aljazeera.com

Answer the following questions to check your understanding of the story.

Which events in the new clip increased the demand for rice?

Wrong! - Which of the events mentioned in the news clip influenced the demand for rice?

Correct! - Wheat and rice as substitutes in consumption. A wheat shortage raises the price of wheat and increases the demand for rice. An increase in tourism in Japan increases the demand for many goods in Japan, including the demand for rice.

Why did the price of rice rise?

Wrong! - The price of rice in Japan nearly doubled over the past year. How did the demand for rice and the supply of rice change? Do we know the relative changes in demand and supply?

That's Right! - The price of rice in Japan nearly doubled over the past year. This rise in price occurred because wheat shortages and booming tourism increased the demand for rice and a poor harvest decreased supply.

How did the rice market move to its new equilibrium?

The price rise _____________.

Wrong! - Do supply and demand change to move the rice market to its new equilibrium, or do the quantity demanded and quantity supplied change? With the increase in demand and decrease in supply, a shortage arose at the original price. As the price rises to eliminate the shortage, how do the quantity supplied and quantity demanded change?

Well Done! - With the increase in demand and decrease in supply, a shortage arose at the original price. As the price rose, the quantity demanded decreased, the quantity supplied increases, and the shortage was eliminated.

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