• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics comment

Extracts from this document...

Introduction

Economics Coursework Economics Coursework SL Afonso Sim�es 12 CLC Word count: 725 words Source: "Time" The article that I chose refers to the impact of the natural disasters in Japan to the price in oil. It mainly talks about the descent of the price of oil, as the world's third largest economy is crippled, reducing a lot of demand for oil. Demand is the quantity of a good or service that consumers are willing and able to purchase at a given price at a given time. We can perceive this from a supply and demand graph. Supply is the willingness and ability of producers to produce a quantity of a good or service at a given price in a given time. As the demand is crippled, the demand line in supply and demand graph shifts to the left. ...read more.

Middle

Nuclear power is the second choice for power these days, so if demand falls for this technology, demand will have to rise in another, such as oil. This will pull back the demand line again for oil potentially stabilizing it. Market equilibrium after accident After mediations from nuclear power plant problems The demand increases, raising the prices again for oil and even more as people will want more diesel oil. Later on the article, it talks about how the governments invested in oil, and supplied more barrels, to have an attempt at decreasing the price of oil. This is buffer stocks system. This is a situation where a government intervenes in a market to stabilize prices. This often happens in unstable activities. This process isn't a very useful one, as it is expensive to store materials and may be seen as in-human to not supply all oil at this time. ...read more.

Conclusion

For the last comment, we can comment on the PED, Price Elasticity of Demand. It's a measure of how much the quantity demanded of a product changes when there is a change in the price of the product. It is calculated by using the following equation: PED = % change in quantity demanded for the product / % change in price of the product. In this specific example, oil, the PED is very inelastic, as it is extremely unless than 1. The PED works otherwise in this example, as price goes down, the responsive is strong, as people will be relieved around the world. PED is very useful to know, as you know what the response will be to changes in prices. This changes everything, even for governments, as then they can know when to act in a buffer stocks system. ?? ?? ?? ?? Economics Coursework Afonso Miguel Sim�es 12CLC ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. CASE STUDY OF OPEC

    an assumption of a Cartel with two member countries, Country A and B is taken. KEY MC Marginal Cost AC Average Cost MR Marginal Revenue Q Qty supplied and demanded of crude oil (in barrels) P Price of crude oil (in $)

  2. Extended Essay Economics

    When a firm is requesting access to CADIVI, it must also submit "solvencias." These must also be submitted each month thereafter and show that a company has paid for certain services and is capable of meeting its obligations. For example, the medical firm needs a solvency each month from the Instituto Venezolano de Los Seguros Sociales (IVSS)

  1. Strategic and Operational Performance Assessment at Petrom

    Despite the unfavourable conditions on the world financial markets, the transaction has been successfully completed thanks to a solid relation between Petrom/OMV Group and the participating banks, he adds. Process Management Process Management refers to the application of knowledge, skills, tools, techniques and systems to define, visualize, measure, control, report

  2. Macro Economics Notes

    However, now lets consider two different countries - Germany and Turkey. In this case the GDP of Germany is 3 times higher per capita than Turkey. While there are limitations of GDP analysis, the vast difference between the GDP rates of each country is significantly large in order to say conclusively that Germany is a richer than Turkey.

  1. Growth and Development Problem Set - IB Economics exam questions and answers.

    knowledge, measured by adult literacy and the combined primary, secondary and tertiary enrolment ratio; and (iii) a decent standard of living, measured by GDP per capita (in US$). The HDI is very useful tool for countries and governments wishing to devise policies that focus on development.

  2. Economics Coursework - Demand&Supply

    The drop of demand for cars during the recession creates an example of the laws of demand and supply. Demand is the quantity of a good or a service that consumers are willing and able to purchase at a given price in a given time period.

  1. case study economics

    An example for free good can be sunlight, air, salt water etc. Considering healthcare, it can be noted that healthcare does not fall into the category of free good. It is an economic good even a public organization like the NHS.

  2. Markets and Price Determination

    A price fall (iii) A decrease in demand * A decrease in demand causes the demand curve to shift left. * At the old equilibrium price p, there is now disequilibrium with a glut of goods occurring. * This causes the price to decrease to a new equilibrium point at

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work