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Demand and Supply for Microeconomics

  • Date Submitted: 03/15/2011 08:45 PM
  • Flesch-Kincaid Score: 65.1 
  • Words: 785
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Intro:
Date of article: Friday 12th March 2010.
Name of Article: China's oil demand increase 'astonishing', says IEA
Source of Article: http://news.bbc.co.uk/2/hi/business/8563985.stm

Summary:
The international energy agency (IEA) spoke about the dramatic increase in the demand of oil from various markets, half of which were Asian markets. In some developed countries the demand was predicted to fall by .3% by the IEA. The IEA in 2010 increased the demand of global oil production by 1.8% also seen as 86.6 million barrels per day. Prices rose to $83 per barrel due to a rise in geopolitical tensions in some producing countries. However prices have dropped to $80 due to “ample physical oil supplies”. Oil production has risen to a high in some OPEC countries and during February Iraq pumped an extra 115,000 barrels a day.
Note on theory:
The Demand theory is an economic theory that concerns the relationship between the demand for goods and their prices; it forms the core of microeconomics. By plotting the quantities that an individual would purchase at different prices, a demand curve can be drawn. Summing the demand curves of individuals will yield a market demand curve, while summing the demands for all goods will in turn give an aggregate demand curve for an economy.
In the article the increase in the quantity demanded at a given price, is known as an increase in demand. An increase in demand can be seen when the curve (D1 – D2) has been shifted to the right. As we increase in different price points we see an increase in demand which is shown from curves D1 to D2. The movement along the curve is a “change in the quantity demanded” where it is different from the “change in demand” which is where the curve shifts outward.

Recommendations/ Agree or Disagree:
I recommend that oil production should have a strict quota on how much oil countries should produce a day and that its stuck to. I see the need for a greater production of oil as more cars, boats,...

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