Economics of Oil Prices Research Papers
In the summer of 1984, Iran and Iraq began firing missiles at oil tankers leaving the Persian Gulf. Analysts in the gas industry predicted that gas prices at the pump will rise due to fear of a potential decline in gas supply. However, in contrast to expectations, gas prices dropped. As it happened, the last half of the winter of 1983-4 was much colder than average. This prompted an increase in demand for heating oil. Heating oil is produced through a process of refining that happens to also produce gas – two gallons of gas for every gallon of heating oil produced. As a result, excess gas went into storage over the winter, and come summer gasoline stocks were 13% higher than they were the previous summer. Before prices ever managed to increase in response to the crisis in the gulf, an increase in supply at the pump caused prices at service stations to drop – to the benefit and joy of consumers.
Lower prices do not always attract more consumers – just like higher prices do not always deter them. When consumers consider a purchase of a good or service they also take the relevant opportunity cost in to account. In the Northeast, New Jersey shares borders with New York and Pennsylvania. But New Jersey does not share taxes with those states – in fact, taxes on gasoline in New Jersey average 10 to 20 cents less than in neighboring states. As a result, consumers who find that New Jersey gas is cheaper even considering the opportunity cost, which consists of resources spent on driving to New Jersey (time, gas, wear and tear on the car), will drive to New Jersey to fill up.
Economics is a complex science and economic terms are often confusing – but economics underlie much of our daily activity, and economic analysis can be applied to most any situation in which humans interact and conduct some kind of exchange. The better our understanding of economics, the more we can leverage that understanding to maximize our utility.
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A research paper is an in-depth examination of Economics of Oil Prices. More than just an overview of what was learned on Economics of Oil Prices, like a term paper is, a research paper contains analysis of Economics of Oil Prices along the lines of organizational theory and relevant published material. Research papers are highly analytical and can often be more than 8 to 10 pages. The key to a good research project is the examination of recently published journal articles and peer-reviewed material on the Economics of Oil Prices chosen. Like the name implies, research papers are exactly that, a paper that examines the information that can be found on Economics of Oil Prices.
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