Question

Refer to newspapers or the Internet and collect information about a recent situation of unrest, such as a war or a terrorist attack. Then, considering all that you have learned about the behavior of producers, consumers, and markets, post a response to the following:

How might such unrest impact the individual demand and supply of goods and resources in the affected country? What happens to market equilibrium, equilibrium prices and quantities; and wages and quantities of resources? Would all products be affected in the same way, or would there be some exceptions?

How would international trade be affected?

Answer 1

We talk about unrest in Kashmir in 2016 post the death of burhan wani. The individual supply was restricted to that part of country due to almost zero movement of trucks. Only limited supplies could be imported during night. National highway was blocked during the day. This resulted in limited supply. Demand for some quantities decreased as income decreased but demand for necessities increased due to panic. This resulted in higher prices. Resource flow was also halted and their prices and quantities increased. Wages fell. As noted above there were some exceptions.

International trade was affected to that part of India. Tourism of kashmir, Handicrafts etc were affected