Economic Article Analysis Essay Example | Topics and Well Written Essays - 1250 words

Economic Article Analysis - Essay Example Formerly, most of the economic analysts opined that crude oil stock might fall by 600,000 barrels over the last week of August 2009. But eventually it dropped by 200,000 barrels less than the expected level1. In a sharp contrast the gasoline inventories experienced an alarming decline of 3 million barrels. However the recession ridden US economy, which were experiencing a falling fuel demand over the past one-year, breathed a shy of relief in terms of a marginal increase for the same. It is obvious when crude oil stock fell to a less than expected level and gasoline stock fell to a more than expected standard, therefore in reverse terms, crude oil draw would be less than that of gasoline. This fact has been rightly pointed out by Phil Flynn, analyst for PFGBest Research in Chicago, the Energy Information Administration (EIA). He further observed that a bullish demand for gasoline neutralizes a bearish crude oil demand. We have observed over the last one-year what immense effect a fal l in effective demand for a commodity can have on its price level. For instance, in less than 6 months (from July 2008 to December, 2008) crude oil price experienced almost 78 percent drop. Thoughtfully an expected fight back of the economy from the abyss of recession perhaps generated some kind of positive demand boost for fuel in general (although slower than expected)2 and thereafter (December, 2008 onwards) might have made some positive price adjustments. The relation between recession and dampening price of fuel might be logically illustrated as follows – recession implies declining production, falling economic activities, that is, industrial, tertiary and primary sector related activities. All these activities use fuel as a source of energy and decline in such activities leads to decline in fuel consumption, resulting in less demand and hence fall in price3. However on one

Policy Essay Example | Topics and Well Written Essays - 2250 words

Policy - Essay Example In essence, externalities are the effects of production or consumption of products and the outcome is passed to the society. However, the society has little to control these externalities. The first positive externality is technological improvement. Some firms have been on the frontline in investing in technology. The firms ensure they have the best technology to assist in production of their products. As such, these products are enhanced to give ultimate services to the people that need them. In such a position the firms are acting as a positive accrual to other firms. Other firms are likely to benefit from this technological improvement (Barr, 45). When there is change in one firm’s technology, the other firms are likely to benchmark this opportunity. As such, they will purchase other machinery that conforms to the stated technology. These industries and firms will have an improved way of producing products and they will extend the positivity to other firms, which are not pa rticularly involved in the production. When there is an improvement in technology, there are various aspects which are improved in the society. For instance, when there is enhancement in technology, it is considered that pollution is likely to reduce. When the pollution is reduced, there are various aspects which are improved in the society. For instance, the society does not feel the pinch of having to inhale clean air. As such, their health status is maintained. This reduces any expenses that are incurred by the society in terms of treatment for complications in their health (Barr, 123). Similarly, it is guaranteed that there will be lower water pollution. As such, the society will have better water services. The water pollution will be reduced in the society, which gives the whole society clean water to use. It is evidently seen that the society did not incur any costs in the acquisition of technology. However, they are getting better water which is clean and hygienic. The same a pplies to the other firms. Initially, the firms did not incur any costs in getting information about the new technology. However, they are now in perfect shape in preventing pollution. A negative externality in production is pollution. Pollution is one of the most threatening aspects in production. During production, many firms exhale and release dirty water and air. This dirty air and water has various effects on the environment. First, dirty air makes the environment unpleasant to live in. This makes the life of other people uncomfortable. When people are not living in a comfortable environment, it is not entertaining. As such, the people will have to make sure they get solutions to these problems that are instigated by pollution from production firms. Apparently, some firms take it as their own initiative to stop pollution. This is an ideal approach in stopping pollution in the world. When all the firms initiate strategies that will reduce pollution, there is a likelihood of havi ng a better environment that is not affected by the negativities of pollution. It is a prudent approach by the governing bodies to ensure that pollution is reduced in the whole world. With technological improvement, scientists have considered that pollution is one of the negative effects in the world (Barr, 65). For instance, pollution is responsible for global warming. The global warming effect has affected many parts of the world and they are looking for strategies of reducing its effects to the world. This creates a scenario