Article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/26/BUHH10S61B.DTL
Summary
The article I read is about how oil production is being overused. Since 2004, the oil prices have increased from $33 per barrel to $132. Production has increased by 1.8%, to 84.6 million barrels per day. These prices of oil will only continue to grow because the world population demands so much and it cannot keep up with our human desires. Due to the rising demand, oil companies would like to sell as much crude as they can. The Organization of the Petroleum Exporting Countries believes there is already enough oil in the market and states there is no need to pump more oil.
Connections
Connections from this article are supply and demand. As price increases, demand will decrease. If the price of a product raises, fewer people who want to buy it; therefore, the demand of the product will decrease. In the article above, the demand for oil was so high, the price had to increase because everyone needed it. When the supply of a product has a short amount, the price will increase because people would want to obtain the goods, but it would be difficult to obtain it since it is so limited. I believe the oil prices will only continue to increase, because we need oil for our daily lives. An example would be transportation. We need oil to help us get through our daily lives.
Reflections:
I believe that with the increase in oil, it will eventually cause people to stop demanding so much . In the future, if our demand for oil decreases, we are safe to say that the price will also decrease. The price will drop because there will not be a high desire and therefore the profit would not be as great. I believe the only way to reduce the price of demand is to find another alternative resource to depend on. We can then focus on the new resources and the demand and price of oil will decrease because no one will be interested in it anymore.
Monday, October 27, 2008
Thursday, September 25, 2008
Chapter One
Article: "Waste must end, forest minister says" from The vancouver Sun, Section D Wednesday, September 17, 2008
Summary:
This newspaper article “Waste must end, forest minister says” from The Vancouver Sun discusses the issues in B.C concerning the industry and how logging companies plan to eliminate valuable tree resources. This article comments on Minister Pat Bell who plans to develop new bio-energy industry that will transform the way wood is used. Decision making is required for new regulations in order to remove barriers efficiently and effectively. Although logging companies are chopping down trees to use production of energy and goods, there are limits to the number of trees available to cut down. Right now in the economy, industry of bio-energy is not doing well as revenues and “[is] expected to plunge 36% this year”. Bell is aiming to give incentives to the loggers in the hopes that less waste can be left behind.
Connections:
An obvious connection in the article to the principles of Economics is scarcity. Economics is the study of scarcity because without it, the study of economics would not exist. In this article, trees are scarce resources available for loggers to cut down and use. In addition, decision making also links with chapter one such that the logging company has to make choices, form new regulations and economic policies that strengthen our economy. The opportunity cost of producing bio-energy in the industry can be the time and money spent on developing another efficient method of obtaining energy.
Reflections:
Economics seems to be a complex topic for one to fully understand. Although some of the key aspects and ideas may seem like common sense to me, there are complicated concepts that require deep thinking. After reading the article and the chapter, I realize that often times opportunity cost is not easy to identify. In this article, it is important for loggers to know the limited amount of resources that are available for them to use. Since trees are scarce goods, we, as rational persons, need to apply effective decision making and strategies that give us the lowest opportunity cost.
Summary:
This newspaper article “Waste must end, forest minister says” from The Vancouver Sun discusses the issues in B.C concerning the industry and how logging companies plan to eliminate valuable tree resources. This article comments on Minister Pat Bell who plans to develop new bio-energy industry that will transform the way wood is used. Decision making is required for new regulations in order to remove barriers efficiently and effectively. Although logging companies are chopping down trees to use production of energy and goods, there are limits to the number of trees available to cut down. Right now in the economy, industry of bio-energy is not doing well as revenues and “[is] expected to plunge 36% this year”. Bell is aiming to give incentives to the loggers in the hopes that less waste can be left behind.
Connections:
An obvious connection in the article to the principles of Economics is scarcity. Economics is the study of scarcity because without it, the study of economics would not exist. In this article, trees are scarce resources available for loggers to cut down and use. In addition, decision making also links with chapter one such that the logging company has to make choices, form new regulations and economic policies that strengthen our economy. The opportunity cost of producing bio-energy in the industry can be the time and money spent on developing another efficient method of obtaining energy.
Reflections:
Economics seems to be a complex topic for one to fully understand. Although some of the key aspects and ideas may seem like common sense to me, there are complicated concepts that require deep thinking. After reading the article and the chapter, I realize that often times opportunity cost is not easy to identify. In this article, it is important for loggers to know the limited amount of resources that are available for them to use. Since trees are scarce goods, we, as rational persons, need to apply effective decision making and strategies that give us the lowest opportunity cost.
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