Essays on The Scarcity of the Resources That Fuel Our Current Economy Assignment
The Scarcity of the Resources That Fuel Our Current Economy
Chapter 1. First Principles
• Resource can be defined as a type of commodity, good, or other asset which can be used to produce a given product.
• Scarce refers to the nature of a given commodity, good, asset, or resource being in low supply.
• Opportunity cost is the cost associated with something (oftentimes non-monetary) which helps to describe what is being given up in order to attain something else.
• Trade-off is the alternative side of whatever decision or choice is made to yield a primary result.
• Marginal decisions – refers to those decisions that are made directly on the margin as a means to affect a positive result.
• Incentive – refers to a thing or group of things that motivates an individual to pursue a given course or action or to obtain a desired object or result.
• Interaction – refers to the interplay that exists between actors, concerns, and interests with relation to the pursuit of economic endeavor.
• Trade – refers to the exchange of goods, services, or money as a function of enriching both parties in a given transaction.
• Gains from trade – refers to the unique subset of positive occurrence that help to lift a nation, group, or individual economically as a result of engaging in trade with another.
• Equilibrium – refers to the state (unattainable) in which economic forces are balanced.
• Equity – is the concept of fairness in economics; oftentimes has to do with taxation.
This particular article discusses the scarcity of many of the resources that fuel our current economy. Although oil is of course the first that comes to mind with reference to a finite resource that is rapidly being depleted, there are of course a litany of others. The article discusses coal, rare earths, and other soon to be depleted resources that have come to define the business cycle and without which it will be hard to imagine precisely how the economy will function or look. However, it is useful to at least consider such an eventuality due to the fact that the rate at which these resources are being consumed is far faster than has taken place at any point previously.
Chapter 12. Perfect Competition and the Supply Curve
• Perfectly competitive market is a market where no competitive inequalities exist and the market is at equilibrium with regards to the level, scope, and number of competitors.
• Perfectly competitive industry – identifies the same concept however in the more microcosm of a given industry.
• Market share – refers to the percentage share of a given market that a firm or industry has captured
• Marginal revenue is the additional revenue that will be generated by increasing sales by 1 unit
• Marginal revenue curve – defines the revenue that will be generated based upon the above definition of marginal revenue upon a curve.
• Break-even price – refers to the price in which the firm will be able to meet all expenses without turning any type of profit
• Shut-down price – refers to the price where the break even price will not be met and will force the industry/firm to shutter its operations
• Industry supply curve refers to the supply curve the helps to define the amount of resources available to a given entity or specialized industry.
• Long-run market equilibrium refers to the ability or inability of the market to maintain equilibrium into the future as a function of the market restraints that currently exist.
• Long-run industry supply curve - refers to the industry’s ability to be able to continue to supply product as a means of meeting expectation and demand into the foreseeable future.
This particular article discusses BlackBerry’s last ditch effort to stay in the market for mobile communications with its BlackBerry 10 platform. As a means of attempting to gain further market share, Blackberry has placed all of its hopes on capturing a higher degree of customers than their previous efforts. Furthermore, the article discusses that Blackberry finds itself in a difficult position due to the fact that it is hoping to reclaim brand image and stance within the market; however, even if the line sells well, Blackberry will not be making a large profit due to the fact that the software is being sold at a breakeven price.
Chapter 14. Oligopoly
• Oligopoly – refers to a situation in which a very small number of sellers define the market place for a given good or service.
• Oligopolist – refers to the individual sellers within the oligopoly
• Collusion – refers to a situation in which firms illegally work together to constrain the supply or inflate the price of a given good or service.
• Game theory – refers to a system by which the way that firms interact within the business cycle can be understood through the concept of a game with iterations.
• Nash equilibrium – is a type of game theory in which a group of two or more non-cooperative players, who are assumed to know the equilibrium strategies of the other, has nothing to gain by changing his/her equilibrium strategy.
• Tit for tat –is an economic concept of supply and demand economics that says that if a given player in game theory makes a given action then the other will respond with a specified counter-action.
• Tacit collusion- refers to a situation in which two or more entities agree to set prices in a type of collusion.
• Price war – refers to a situation in which a group of firms engages in price cutting as a means of undercutting the competition and gaining a larger share of the market for themselves.
• Product differentiation – refers to the means by which a firm seeks to differentiate or set apart its products from the competition. Naturally such a definition goes heavily into the realm of marketing.
• Price leadership – refers to a situation in which two or more entities agree to set prices in a type of collusion.
This particular news article discusses the fact that the recent spike in gas prices could have been the result of collusion between firms. Moreover, the article mentions that due to the fact that only a handful of companies control the market for fuel sales within California, the market is heavily influenced by an oligopoly. Such behavior is of course illegal and the article sets out to state that there is a way that firm evidence gathered from statistics and gas sales could corroborate this evidence. Furthermore, it is indicated by the author that time has proven that there was indeed no supply shortages during such a time to affect the price in such away.