Exercise 1: Question 1. Everyone’s Gasoline Problem
For any consumer who owns a vehicle and has to commute daily, the rise and fall of gas prices can be difficult to comprehend. In order to understand the variances for gas and oil prices, one must evaluate the core reasons for the fluctuation. According to recent research, the quick changes in oil and gas prices can be directly associated to several factors, which include supply and demand, market speculation, taxes and the expense of refining crude oil into gasoline (Herbert, 2008). These factors affect the price of oil and gas in independent ways, but also are related. Supply and demand has a direct affect on the price of crude oil and when supply is high, usually the price of oil decreases. When supply is low, the price of oil increases. In terms of demand for example, an oil price increase is seen as reducing aggregate demand because of a reduction in spending on goods and services (Olatubi & No, 2003). In terms of supply, this increase will likely produce even more widespread effects and oil price increases will cause overall production costs to rise, shifting the aggregate supply curve to the left (Olatubi & No, 2003). According to research, growing economies globally have increased the demand for crude oil while the supply has remained fairly constant. According to the Associated Press (2013), the average price for regular unleaded gasoline, which is $3.25 per gallon, is the lowest since December 26, 2012. In September 2013, AAA Mid-Atlantic said that the average price of a gallon of regular gas in the D.C. metro area was $3.55, compared to $3.56 the prior week (AP, 2013). Market speculators play a role because oil is a product to them that can be bought and sold based on instability of prices. Speculators try to forecast world events that could impact supply and demand. They buy contracts for oil to protect themselves from sudden increases in the price of oil and when prices rise, they can then sell their contracts that were purchased at a cheaper price for a significant profit (Herbert, 2008). Taxes also effect the variances in prices around the country. Refining oil to gas and transporting it to the marketplace also has a significant impact on the price of gas. A portion of the cost of gasoline goes to turning crude oil into fuel, moving it to gas stations, and retail markup.
Dr. Carl Hart had a very rocky childhood and through his own determination to not repeat the past has gotten to where he is now in life. He comes from a broken family plagued by domestic violence, divorce, and a lack of support while he was growing up. Dr. Hart’s views on; social support, addiction and the physiological effects on the brain, factors to take into account when assessing drug abusers, drug policies influencing discrimination, and decriminalizing drug use are well articulated through his book High Life; in which enabled the audience to have raw reactions to his personal views.
Gasoline is one of the many conversation starters anywhere you go. People have different opinions on why gasoline prices are fluctuating at such a rapid pace. Some Americans have chosen a way of thinking towards the prices. Whether it be making up rumors or just plainly trash talking towards our government. You make ask yourself the same questions many economist do, why has the price of oil been dropping so fast?
Sukirno (2004) states that foreign exchange rates or foreign exchange rate is the price or value of a country's currency is expressed in another country's currency, or it can also be interpreted as the amount of domestic currency needed to get one unit of foreign currency. Meanwhile, according to Mankiw (2013) the exchange rate between two countries is a rate agreed resident of both countries for mutual trade with one another. Economists distinguish between the exchange rate being two (Mankiw, 2013), namely:
Supply and demand is defined as the relationship between the quantity that producers wish to sell at various prices and the quantity of a commodity that consumers wish to buy. In the functioning of an economy, supply and demand plays an important role in the economic decisions in which a company or individual may make.
The focal article I chose is Dynamic Pricing: The Future of Ticket Pricing in Sports by Patrick Rishe published on January 6th, 2012 through Forbes. Pricing is an important component of the marketing mix because it is the element where managers have expectations of customers paying their money to the organization (Kopalle, 2009). Compared with other elements of the marketing mix, pricing has the advantage because there is a high level of flexibility. The flexibility is because prices change continually (Smith, 2008). The opportunity of quick price changes also has disadvantages. For much of the 20th century, the vast majority of sport managers employed one of two pricing strategies: the one-size-fits-all approach, where every ticket price
Since the 19th century, gas has gradually become a necessity to mankind. It has been used for lighting our houses, to produce heat, to cook our food and to run our vehicles. As time passed, the price of gas has known many changes in Montreal. By the year of 2008 the price was relatively low, but suddenly became very high in 2014. This year in Montreal, the prices are as low as 3.4 US $/G. When considering the previously mentioned facts, we ask ourselves why the price of gas is low and what are the factors fluctuating its price. The main factor responsible of gas price changes is the cost of oil.
The modern world of today runs on fossil fuels with crude oil being the live blood of industrialized countries. Though much of the twentieth century old was plentiful easily acquired and low in cost it has only been in the past thirty years that we have seen oil prices rise substantially. This can be attributed to many different reason. These price changes have challenged the industrialized world to become more creative with their techniques of both acquiring oil and using it.
In 1970 oil reserves became more scarce, leading to a decrease in production, while consumption continued to grow rapidly (Wright, R. T., & Boorse, D. F. 2011). In order to fill the gap between rising demand and falling supply of oil, the United States became more and more dependent on imported oil, primarily from Arab countries in the Middle East. (Wright, R. T., & Boorse, D. F. 2011). As the U.S and many other countries became highly industrialized nations, they became even more dependent on oil imports. With demand being higher than the actual amount of supply, prices kept rising reaching a peak of $140 a barrel in 2008. (Wright, R. T., & Boorse, D. F. 2011).
The bitcoin currency was created in the midst of the financial crisis of 2008-2009, as an experiment and political statement against the global government and central banks’ ability to manage monetary policy. Bitcoin is a digital currency based on an open-source, peer-to-peer internet communications protocol. The goal of the system was to create a private global traded currency without the need for third parties to guarantee transactions. The backbone of the bitcoin system is the decentralized blockchain, or the public register of all transactions that are verified by the network. The reason for the blockchain is to prevent the problem of “double spending” that past attempts at pure digital currencies failed. Additionally, the blockchain of the system controls the money supply of bitcoins, which are rewarded to “miners” or individuals who use their computers to verify transactions on the network, while they attempt to solve a time-extensive math algorithm that is hard to find a solution to, but once found is very easily verified (computer speak known as “hashing”). A mine who finds a solution to the algorithm creates the next block in the blockchain, which is verified by the network as a “true” solution to the algorithm. From then, that block records transactions for the time period until the next block is found, which at the current difficulty of the network is about 10 minutes. For finding a verified block, the miner is awarded a set amount of BTC or bitcoins (currently 25), which decreases over time, until all 22 million bitcoins are mined.
Price wars happens when companies continue to lower prices to undercut the competition. It can be used to increase revenue in the short term or as a long-term strategy to market share. This can be prevented though, through strategic price management, and thorough understanding of the competition, or even communication with competitors. However, it can most likely occur in an industry for various reasons such as:
In this article about so called “price gouging”, Paul Stossel argues that increasing/“gouging” prices during an emergency actually is beneficial to proper market functioning. The main argument Stossel makes opposes that of Texas Attorney General Ken Paxton, who set severe punishments for those guilty of price gouging. Stossel examines why this is illogical, backing his thesis with evidence including supply and demand, black markets, and more. Firstly, the punishments for increased prices on essential goods seen in Texas during the threat of Hurricane Harvey displayed a lack of understanding in economics, specifically supply and demand.
As an example, if a 2% increase in price resulted in a 1% decrease in
According to some criminal justice experts, many feel that the laws surrounded around sex offenses come from a place of prejudice against criminals especially sex offenders. This comes from the belief that the harsh penalties that are set on them. One researcher by the name of Joseph Kennedy investigated crimes that are considered monstrous such as sex offenders and concluded that the desire to punish offenders such as sex offenders is a direct result of changes in the United States social and economic structure within the last several decades that had eroded social solidarity that had led to hyper-punitiveness in the United States criminal justice policy practices.
Retail sales is over 5 billion rand in 2007. Mr. Price is in competitive position in clothing industry of South Africa. Their
Price, in terms of money, is considered as a measure of value and as the quantity of money in units of some form of currency which one may buy or sell a commodity (Fetter, 1912).