Chapter 2 – Supply and Demand – Canadian car sales

http://www.cbc.ca/consumer/story/2008/10/14/cars.html

Summary:
Automobile sales in Canada dropped in August, August is the third month in a row that the country has seen fewer cars and trucks sold. According to statistics Canada, 137 937 vehicles were sold by Dealerships in August. A drop of 2.3% compared to July. Other cars, like passenger cars, slid 4.2% in the month, to 73 484 vehicles. Entirely responsible for the fall of sales down 6.8% in August was the North American build cars. The article states that sales of new cars and trucks fell 0.8% in July and 1% in June compared to the month before. The cause of these sales is most likely caused by the rising oil prices combined with the heightened economic uncertainty factor.

Connections:
The concept of supply and demand is when manufacturers and consumers connect and communicate to establish a supply and demand market. The car manufacturers are producing cars, but consumers are not willing to purchase any more cars from them. External factors like rising oil prices and environment concerns are influencing the consumers. Consumer characteristics and income also highly affect consumers of cars. Therefore, the sales of automobiles in Canada dropped because mainly overseas car manufacturers are in more of a demand than North American cars. Mainly, the external effects of high oil prices affect the expectations of future outcomes and characteristics of buyers and consumers.

Reflection:
The sales of automobiles certainly reflect on the world’s current economic situation. I understand that oil and gas prices is a very hot topic today in the market, I think that automobile sales would certainly drop in demand because buyers are more concerned about lowering their daily spending. As for myself, I would preferably look for a convenient and fuel efficient vehicle instead of a heavy duty gas guzzler. I think that preferences and characteristics of buyers and consumers have a big say on this issue. Although automobiles are a necessity to many people, people tend to minimize fuel consumption to try to save money on other things, and help the environment while they are at it.

Chapter 1 – Scarcity – World Food Price Crisis

Chapter 1 – Scarcity – World Food Price Crisis

http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis

Summary:

This article reports on the global crisis of food pricing in the years of 2007-2008. Dramatic rises in world food prices create a global crisis and cause instability politically and economically. This dramatic increase in pricing has caused major social unrest in both poor and developed nations. The causes of this worldwide crisis in food prices continue to be debated. Initial causes of the price spikes in 2006 include unseasonable droughts in grain and wheat producing nations and also the rising oil prices. As a result of the oil price rising, the costs of fertilizers, food transport, and industrial agriculture have all risen.

Connections:

In the article, the global crisis of rising food prices relate to the scarcity of resources like oil and also external factors, like the unexpected seasonal droughts. The scarcity factor of the economy, stated in the text, is that of an “insufficient amount or supply of a specific resource”. In the article, the scarce resource would have to be the oil and resources needed to produce food for the global market. Since oil is a scarce resource, the supply and demand of oil is constantly changing, thus affecting the supply curve of food and its global market pricing.

Reflection:

I have always believed that the world food pricing crisis would affect us one day. Simply because our world is still growing, population wise, we need to produce more food to feed everyone on the globe. The scarcity of food and what allows the food industry to run is oil, a resource needed to run industrial agriculture and import/export of foods. I believe that the rising food prices were inevitable, and that everyone should consider saving energy and resources by refraining from wasting resources and using them wisely.