Readers question: Should the Government intervene to deal with the problem of Oil Shortages or is it better to leave it to a free market? As oil runs out, supply will shift to the left and the price will increase. Because demand is inelastic, oil firms will make increased profits. This creates an incentive for …
The price of oil reached another record high yesterday – $125 Brent Crude oil reached $126 US light crude oil reached $128 before setting back to $127 This means that, even adjusted for inflation, oil is now close to the all time high, last reached in the 1970s. What are the reasons behind the Recent …
Readers Question: Why is US in Recession? According to the latest statistics provided by the Economist April 24th 2008 US economic growth is 2.4% year on year. In the last quarter, growth is 0.6%. This is still a long way off the technical definition of a recession – negative economic growth for two consecutive quarters. …
Readers Question: explain why two sectors of the UK economy are growing faster than other sectors ? According to the Office of National Statistics for March 2008 Retail Sales Volume Seasonally Adjusted (2000=100) increased to 140.3 an annual growth rate of 4.7% Manufacturing grew at only 0.9% Services grew at 3.2% latest statistics at ONS …
Readers Question: The Bank of England has released £15bn into the economy. That increase in the money supply will surely cause inflation? So interest rates having fallen will be raised, worsening the housing market and making the credit crunch even worse, not better….surely? The Bank of England is planning to inject money, primarily into the …
Readers Question: when will oil run out? It is difficult to say. Firstly on the demand side, demand for oil is rising faster than many expected. This is largely being driven by rising growth in developing economies such as India and China. Today we consume an average of 85 million barrels daily. According to the …
OK, I have a question for you. This was the example which popped to mind as I was reading your entry. (price elastic products) Here in my Middle Eastern country, sheep are sold for meat. Each year, prior to the Festival of the Sacrifice (Muslim holiday where every family buys a sheep to butcher at …
Readers Question: When would you want to own a business that sells price-elastic products? Why? Price elastic products mean that if there is an increase in price, there will be a bigger % fall in demand. Therefore, with elastic goods, there is little incentive to increase the price because there will be a bigger % …