Chapter 2

“Oil prices rise ahead of weekend” – Vancouver Sun on June 16, 2006

The oil prices continue to rise in New York and there are concerns on the demand and the prices from rising above $75 US a barrel. It is a fact that the central bank would face problems on inflation. If the price of oil keeps rising, it could hurt fuel demand. Analyst, John Kilduff has mentioned that the factor that keeps the prices up isn’t supply, it’s demand. The International Energy Agency changed its prediction for growth in demand during 2006 to 1.24 million barrels a day from 1.25 million barrels a day. It is reduced by 30 percent from its growth estimate in January. Oil supply from Africa and the Middle East is also a cause of the inflation. Also, prices have been inflated for months by concern over the nuclear program of Iran, which has seen its output of 2.5 million barrels daily cut about 20 percent by militants. The development between the United States and Iran caused prices likely to stay in the $68 to $72 a barrel range. Another factor affecting oil prices is the threat of weather. For example, the threat of hurricane season and unseasonably high temperatures in some parts of the United States are raising expectations for high gas and power demand starting in fall. Natural gas supply is at its highest level ever for this time of year.

Relationships to Chapter 2 – supply and demand (oil)

This articles refers how gas demand is rising and how the interaction between supply meets the demand of the public. We know from chapter 2 that factors that cause prices to increase could be the demand is increased, supply is pinched, profit margins are low, substitutes for the specific resource, etc. What the article says is that demand is rising, even though the amount of oil production remains the same, prices are still on the rise. The only reason that can explain this is because of demand. We simply want more oil everyday for energy. And thus if we keep the supply constant, demand for oil will rise and so does the price. In this case, the tense situation between the United States and the Middle East will also cause the price of oil. Another factor could be weather too. In this article, they mentioned the demand of oil in United States will increase because the weather will get cold and people require more energy, such as oil. In summer, the demand of oil will decrease. For example, the threat of hurricane season high temperatures in some parts of the United States are raising expectations for high gas and power demand starting in Fall. I think since oil is still inelastic in the world, the change of demand might be still constant but as prices still rising up, there will always a point where oil will become more elastic because other resources can be replaced oil.

http://www.canada.com/topics/finance/briefing/story.html?id=7da107bf-fd61-4bfd-8b72-410185e68a34&rfp=dta

Chapter 1

“Scarce industrial land must be preserved by cities’ economic health” – Vancouver Sun on July 10th, 2006

This article is referring to the scarce of land use of industries. Canada is the third largest country in the world; however, we often overlooked the scarcity of industrial land. It is hard to mix land use, including residential, commercial and industrial. There would be little reason to live in Canada if the amount of spaces is so restricted and limited. Due to this fact, Vancouver economy would be dependent on tourism. Industry is primary in the economy. Not only it provides employments, but some businesses need suppliers to deliver products. In 1972, Vancouver had about 2, 400 acres of industrial-zoned land. By 1995, the figure had dropped to about 1, 700 acres. Ideas came on to city council to adopt policies to preserve what was left. However, the latest inventory shows there are only 89 acres designated for industrial uses remain undeveloped. The only land left is usually located or vulnerable to traffic congestion and this cause the limitation of businesses. The shortage of industrial land leads to an increased in price which well exceeds prices of residential property. This caused pressure both economically and politically. People have also became more interested in the construction of houses. Preserving industrial land has become a priority. Also, a regulatory system is needed for the city councils.

Relationships to Chapter 1 – resources (land for industries) – scarcity

As we learned in chapter 1, scarcity is “an insufficient amount or supply.” In economic terms, anything that has a limited supply is considered as scarce. That states almost everything is scarce. Even though Canada is a large country, most lands in Canada are used for residential use. Industrial work accounts for a big part of our economy and with it being scarce, our economy will have a big negative impact. Also, increased in population will cause more people living within one space. Land will not grow while population grows With the limited land we have in Canada, the price will increase quickly. This is because there’s a high demand, yet the supply available is limited. Like the article has addressed, people will turn away from these high prices and move elsewhere. This will affect Canada’s economy as it depends greatly on the exporting of products manufactured from industries. I think preserving the land is definitely important to our economic. Land can be preserved by regulations controlled by the city councils, use it sustainable or put more restrictions on people who buys the lands.

http://www.canada.com/vancouversun/news/editorial/story.html?id=7e9f24d2-58a8-4a14-a81d-70fbb403a63e