Gas Price Equilibrium

As we have talked about in class, prices in an economy are determined largely by the movements of supply and demand; as determinants of these goods change, the P and Q of the good change as well.  Gasoline is an item that is constantly in flux, and thus should serve as a useful commodity for us to perform a case study.

I would like for you to read the two provided articles, each concerning gas prices.  The first article talks a great deal about the future of gas prices.  Ignore the jargon (futures?  quantitative easing?) and focus on his message, which should come through with a couple of readings.  The second article discusses the affect of oil and gas prices on the economy, and puts particular attention on the (somewhat) counter-intuitive idea that lower gas prices could actually hurt the economy.

Using what we have learned about equilibrium in class, answer the following questions in your post.

• What is currently happening to gas prices?  What are the economic reasons for this?  (Hint:  what is causing the curves to shift?)  Be specific as to what curve you are shifting.
• What are the benefits of falling gas prices?  How do they help the economy overall?  Use equilibrium in your answer.
• Are there any problems with falling gas prices?  What are they indicative of?
• Based on your (perhaps rudimentary) knowledge of current events and economics, what do you think will happen to gas prices throughout the duration of this year and into next?  

The first blog post is due by midnight on Saturday, October 1st.  The second post will be due by midnight on Sunday, October 9th.

Addendum:  Here is an article that talks about gas prices for the most recent week.  I am curious as to how you all feel about the ideas put forward by some of the economists/analysts.  In particular, look at the following:

• Many of the analysts talk about Americans changing their consumption habits.  Do you really think that oil consumption habits really changed in just a few months?  What does this suggest to you about the elasticity of oil/gasoline?
• The analysts also talk about shocks in Libya.  The country still remains in turmoil, so how much credence do you give their theories concerning Libya and oil prices?  And is Libya a supply or demand shock for oil?

Again, please post by Sunday at midnight.

Parking Economics

One thing that we have seen so far is that economics is the study of choices, and often those choices relate to the rationing of goods.  For this blog post, I want you to consider the rationing of a good near and dear to your heart:  parking at high schools.

Read this article about parking in Loudoun County, VA and consider the questions below.

• What do you make of Brett Fulcer's comment about parking in paragraph 4?  Why should you pay to park somewhere?
• What is it about suburbs that has ingrained in us the idea that parking has no monetary cost?  What are some of the non-monetary costs of parking?
• In paragraph 10, a parent complains about having to pay for sports and parking as something that "goes against what is normal and fair practice."  
• How does the concept of opportunity cost help explain the budgetary decisions that are being made?

You do not necessarily have to answer every bullet, but remember to use economic concepts (opp. cost, scarcity, etc) in your answers.  Your first blog post is due by midnight on Saturday, September 17th.  The second post is due by midnight on Sunday, September 25th.

Addendum:  Tuesday, September 20th


So as I trolled the internet looking for news, I stumbled on this article concerning an app that allows you to auction your parking space.  Yes, even free ones.


I would like for you to read the article, and consider the following questions:

• What is your general reaction to the app?  Good idea?  Waste of money?
• The app allows you to sell your parking space; implicitly, it seems to be implying that you "own" the property rights to the space.  If curbside parking is free, do you really "own" the space?  Should this even be legal?
• What are the economic costs of waiting for parking?

Again, your second blog post is due by midnight on Sunday, September 25th.

Welcome!

Hello everyone, and welcome to A.P. Economics for the year 2011-2012. I hope that you will find the class both enjoyable and interesting...that's the goal, anyway.


Indeed, you are taking economics in one of the most exciting periods in economic history, and I would argue that the great ideological debate of your time is going to center on economic issues.  You have done wisely to choose to educate yourself on these matters.  Kudos to you.  The blog is intended to be a kind of forum where you can bounce ideas off each other outside of class, and actually apply some of this economics stuff to more "practical" areas. After all, the last thing I want you to think is that economics is some sort of abstract field that has no relevance to the outside world.

You do not have to create a Google Account to make postings, although if you have one feel free to use it.  All you have to do is click on the blog post itself.  Then, click on "Comment."  You will be given a box to type your comments.  Where it says "Choose an Identity" select "Name/URL" and type at least your first name and last initial, or your first initial and last name.  Then, publish your comment.


I have to approve all comments, so don't expect to see yours pop up instantly.


Your first blog post is simple. Please post what you did over the summer, and two of the following: your favorite movie, book, band, or television show.  This assignment is due by midnight on Sunday, September 4th.