Question

In the 1964 movie,Goldfinger, James Bond takes on the notorious gold smuggler andjeweller Auric Goldfinger. Goldfinger’s evil plan involves destroying the United Statesof America’s biggest stock of gold at Fort Knox, hence making Goldfinger wealthier.According to supply and demand, why does Goldfinger’s plan make sense? Explain,using a diagram.

Answer 1

Destroying the US biggest stock of gold will cause decline in supply of gold in the market . So the supply curve shifts left , this causes equilibrium price of gold to rise in the market . Thus Goldfinger will be able to sell his smuggled gold at higher price in the market due to this sudden supply shock , which will make him wealthier .