Economics in Action High Gas Price

Economics in Action High Gas Prices

Dylan Matthew Boisclair

Steven H. Fries

Millersville University

Abstract

How high gas prices affects the economy and what consumers do if the prices of gas would rise or fall and what the supply and demand of the gas prices would affect a consumer’s decision. Apply original thought to answer these questions. What is the issue? What microeconomic principles apply? How does any of this affect me? Use microeconomic concepts, what do you propose to improve/change/alter the issue? Defend you proposal. What the issue of price ceiling can actually do to the economy and how gas prices can’t be influenced do to supply and demand. What happens to consumers in the short run and long run with higher gas prices and how they plan to fix the issue and what consumers are doing to cope with high case prices? Also how higher gas prices can be good for the economy and how it affects consumers?

Economics in Action High Gas Prices

The weekend of (2005) gas prices reached nearly $6 in some parts of the country. Costumers limited their purchases rather than filling up their gas tanks. The issue at hand is higher gas prices and consumers not willing to pay for the gas, driving prices even higher. Then if the country has a natural disaster that temporarily shuts down oil wells prices will then go up. The economic principle that applies is supply and demand. So what is there to love about high gas prices? In (2005) government took a hands off approach to gas shortage, basically prices went up and everyone was able to buy as much gas as they wanted. So the price system performed very well. However consumers complained about prices. Consumers rather pay a dollar more and not have to wait in line for gas. The issue of price ceiling can actually do more harm than good. Economically in the short run consumers don’t have to wait in gas lines. This affects me because being a college student that’s short on money I rather try and find a gas...