Article Analysis Paper The United States consumes more than 25% of the world’s petroleum products which is a large percentage, considering only 3% of the world’s oil reserves are produced by the United States. Given the demand for petroleum products such as gasoline, understanding why Crude oil prices have skyrocketed in recent years, is not hard. According to the article “Ending America’s Oil Addiction,” the surge in crude oil prices can be reduced in large part to the simple concepts of supply and demand. (Cooper, 2008) This paper will define terms such as economics, micro economics, the law of supply, the law of demand and the factors which lead to a change in supply and demand. This paper will also summarize the article and …show more content…
90) Since 2004 the demand for gasoline has been constant and the price of gasoline has continued to rise, causing gasoline expenditures to rise astronomically. However, given that an acceptable substitute for gasoline does not exist, consumers are unable to cutback on the amount of gasoline being consumed. The article suggests that some reasons for consumers’ inability or unwillingness to cutback on the consumption of gasoline are long commutes, the use of vehicles which are not fuel efficient and a lack of alternative solutions such as carpooling and public transit options. The law of supply also suggests that if a firm cuts back on the amount of a good being supplied, the cost of cutting back outweighs the cost of continuing the supply. The Law of Demand The examination of the correlation between the price of a good and the law of demand is necessary to predict how market forces react to a reduced supply of goods. Dictionary.com defines price as “the sum or amount of money or its equivalent for which anything is bought, sold, or offered for sale.” (para. 2) Price is an essential ingredient of the law of demand. The law of demand is “quantity demanded decreases as price increases, all other things being constant” (Colander, 2004, p. 188) The substitution of alternate goods accounts for the law of demand. As the price of goods such as gasoline increases, people tend to replace it with similar goods which may have a lower price. If a good has
1. Americans are known for their long-term love affair with their cars. But as gasoline prices soar and concern about the environment mounts, the standard of living by ordinary people on a daily basis also become difficult; the need to conserve gasoline has become increasingly clear. What would it take to reduce the overall demand for gasoline in the United States most especially as we see it now?
Management in healthcare institutions obtains presentations that pertain to workers’ injuries and illness costs. The figures acquire adequate support from the management provided that the data cites credible and the right references. However, researchers lack adequate hard data and research backing to defend direct and indirect cost ratios that they frequently utilize in relation to the safety-related literature.
The consumption of the oil cause changes in the supply and demand. The United States produces 11 million barrels of oil every day. We are one of the biggest countries to have a big influence on the production and prices of the oil. The basic supply and demand theory explains that the if a product is produced more, the cheaper it should sell. If a country were to double the output of oil day, prices would fall and the Production is high, but the distribution of oil isn’t keeping up with the market. The United States builds an average of one oil refinery per 10 years. This is a net loss due to the fact construction has slowed down since 1970s. Since 1970s, the United States has 8 less oil refineries today. The reason why we are not oversupplied with cheap oil is because of the other countries’ higher net margin and the only operate at 62% of their capacity. Excess capacity is only there to meet future demand. With demand moving accordingly, oil prices will continue to be set mostly by the market — despite external players’ best efforts. (McFarlane)
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Woeste, L. A., & Barham, B. J. (2007). Undergraduate student researchers, preferred learning styles, and basic science research: A winning combination. The Clearing House, 81(2), 63-66. Retrieved from http://search.proquest.com/docview/196879481?accountid=35812
Supply and demand lies in the heart and soul of economics. The concept is perhaps the single most driving force in an economy, specifically a capitalist economy. Supply and demand is based on two concepts: The law of demand and the law of supply. The law of demand states that the demand of a product rises as its price falls, therefore the demand of a product falls as its price rises. A good example of this occurs in grocery stores. If the price of a case of Coca-cola drops from $6.99 to $2.99 the demand for the product will rise because more people are willing to pay $2.99 rather than $6.99. Not only will typical consumer of Coca-cola purchase more but consumers who are not normally willing to pay $6.99 will make the purchase. Substitution also plays a role in the equation. Substitution occurs when consumers substitute one good for another based on price levels. In the Coca-cola scenario, some Pepsi drinkers will purchase the Coca-cola given the case of Pepsi is price higher.
The “U.S. became the world’s top producer of petroleum and natural gas” in 2013 (Energy Infrastructure). “Capital spending in the infrastructure that moves and transforms oil and gas into everyday products … has increased by 60 percent between 2010 and 2013” (Energy Infrastructure). The rise to become the top producer has led to the decrease in “U.S. oil import dependence” and the “rise of U.S. product exports” (U.S. Oil Import Dependence). The increased exportation of oil and gas by the U.S. has allowed both of these products to become large moneymakers for the United States. Although we will probably never “completely eliminate our need” for oil, we can reduce our petroleum consumption and the damage we inflict on the environment (Reduce Oil Dependence Costs). By decreasing the “dependence on oil” in new vehicles, there has been a
Supply and demand is best describes as the varying of prices of a specific service, product or commodity and the desirability for consumers. In theory, the supply and demand model works best for markets that are normally in perfect competition. Now in order for this desired market to work, there has to be a numerous amount of sellers and a numerous amount of buyers that have no real or major impact on the pricing of goods and services. In the follow essay, we will receive a better understand on what the supply and demand really is, further discuss a brief historical perspective on the supply and demand in comparison to the fickle prices of gasoline, go into detail about government involvement in gasoline prices, and finally examine how the supply and demand of gasoline is applicable in our everyday lives.
The demand of gasoline has increased steadily over the last twenty years. In 1981 the U.S. averaged 6.5 million barrels of gasoline consumption per day. By comparison, in 2004 the U.S. averaged 9.2 million barrels of gasoline consumption per day. For most of this time period, gas prices stayed relatively the same. This is because the U.S. refineries increased their production to meet the demand and maintain the equilibrium price. Also during this same time period worldwide demand for crude oil increased 27%. Crude oil producers also increased their production to meet the demand keeping prices the same.
A sudden increase or decrease in the supply of a particular good is also known as a supply shock. A supply shock is an event that suddenly changes the price of a product or service. This sudden change affects the equilibrium price. The two types of supply shocks that exist are the Negative Supply shock and the Positive Supply shock. A negative supply shock, which is a sudden supply decrease, will raise the prices and shift the aggregate supply curve to the left. A negative supply shock can cause stagflation due to the combination of raising prices and the falling output. Meanwhile a positive supply shock, an increase in supply, will lower the price of a good and shift the aggregate supply curve to the right. A positive supply shock could be advancement in technology which most certainly makes production more efficient which thus increases output. For example a positive supply shock could be shown in the early 1990s when communication and information technology exploded which resulted directly in productivity increase, and an example of a negative supply shock would be that of the high oil prices associated with Arab oil embargo of the early 70s is the classic example of this occurrence. Any other factor could also produce this effect. Such as if
As the articles states that "research suggests that skills learned in playing an instrument may mirror effective reading" (Cho, D. L., & Vitale, D. L., 2014). I agree with this because you need to learn how to read the music notes, just like you have to learn how to read to read a book. So, when a child is learning to play an instrument they gain knowledge and skills that could be used in many other ways. Also, learning to perform music has many other skills that you could use in other subjects and in the long-term because when you learn to play a musical instrument you gain skills that improve your capabilities of your memory (Cho, D. L., & Vitale, D. L., 2014). They will also gain teamwork skill because when you play an instrument you are most likely part of band and also, in order to make music you need to work with others (Matthews, M., 2011). Also, increasing coordination, hand eye coordination because when playing an instrument, you need read the notes and play the instrument at the same time. How I can incorporate art into the curriculum is by playing music in the classrooms this is a great way to incorporate music a little bit at a
Understanding the fundamental concepts of economics allows us to analyze laws that have a direct bearing on the economy. These laws and theories are essentially the backbone of how economics is used and studied. The law of demand can be expressed by stating that as long as all other factors remain constant, as prices rise, the quantity of demand for that product falls. Conversely, as the price falls, the quantity of demand for that product rises (Colander, 2006, p 91). Price is the tool used that controls how much consumers want based on how much they demand. At any given price a certain quantity of a product is demanded by consumers. As the price decreases, the quantity of the products demanded will increase. This indicates that more individuals demand the good or service as the price is lowered. This can be illustrated using the demand curve. The demand curve is a downward sloping line that illustrates the inversely related relationship of price and quantity demanded.
The article that will be used for this analysis is “Supply, demand, and the Internet-economic lessons for microeconomic principles courses” by Fred Englander and Ronald L. Moy. There will be definitions for the following economics, microeconomics, Law of supply and the Law of demand. Another subject that will be discussed is the identification of factors that lead to the changes in supply and demand. In order to better understand what is being discussed going to start with the definitions.
The US consumed 142 billion gallons of gasoline in 2007 and the tax applied on it is 18. 4 cents on one gallon. All around the US, there are around 162,000 retail gasoline outlets. With the price of crude oil hovering around $100 a barrel, it is no wonder that concern is growing about the gas prices being so high. After all, modern economies are kept moving by this lifeblood. For instance, in the United States alone personal vehicles consume more than 140 billion gallons of diesel fuel and gasoline per year.However, there are several factors that contribute to the gas prices being so high. Given below are a few of them. Increasing Demand for Oil One of the main catalysts for the incessant rise in gas prices has been one of the most
The substitute goods. In more detail if the price increase in a product then the consumers will prefer to buy its substitute and its demand will increase. For example if the price of pork raises the demand for lamp will rose.