Essays on The Economics and Ideology of Free Trade Assignment

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The paper “ The Economics and Ideology of Free Trade” is an actual example of the assignment on macro & microeconomics. If new oil fields start-up in production, the supply curve will shift to the right. This is because a startup of new oil fields will lead to an increased supply of oil for central heating, this increase in supply is mainly due to an increase in capacity, each oil field will be producing according to its own capacity. The prices will also fall due to increased supply, what will push the prices downwards is the decreased demand due to excesses in supply, when new firms enter a market; supply increases and cause downward pressure on the market price.

Sometimes producers may decide to deliberately limit supply by controlling production through the use of quotas. More firms’ increases market supply and expand the range of choices available. The fall in the price of gas will result in movement along the supply curve in a downward direction. This is because the fall in the price of the gas which is a substitute will force people to go for gas which is cheaper and serve the same purpose. this reduction in the price of gas will compel or rather put downward pressure on the price of oil for central heating.

if prices are not reduced then any rational consumer can not opt for expensive products with other products which can supplement them being available in the market. Anticipation for an upsurge in demand for central cooking oil will lead to a shift in the supply curve upward and to the left. This is due to the fact that anticipation for the increase in prices will force the firms to safe for future production in anticipation of higher profits which will come together with higher demand.

The decision to sell a good today depends on expectations of future prices. Sellers seek to sell the goods at the highest possible price. If sellers expect the price to decline in the future, they are inclined to sell more now. If they expect the price to rise in the future, they are inclined to sell less now. If the demand for petrol increase the supply curve will shift to the right.  

References

Australian Trade Commission (ATC), 2011, International Agreements on Trade & Investment,

Available at http://www.austrade.gov.au/Free-Trade-Agreements/default.aspx

Edge, Ken, 1999, Free Trade and Protection: Advantage and Disadvantages of Free Trade,

Available at http://hsc.csu.edu.au/economics/global_economy/tut7/Tutorial7.html

Graham, Dunkley, 2004, Free Trade: Myths, Realities and Alternatives, Zed Books, Harvard

Kerr, William & Perdikis, 1998, Trade Theories and Empirical Evidence,

Manchester University Press, Manchester.

Leonard Gomes, 2003, the Economics and Ideology of Free Trade: A Historical Review, Edward

Elgar Publishing, Chicago.

Shaikh, 2007, Globalization and the Myths of Free Trade, Taylor & Francis, New York

Yang, Xiaokai, 2005, an Inframarginal Approach to Trade Theory, World Scientific, Gent

Zhang, Wei-Bin, 2002, A Theory of International Trade: Capital, Knowledge and Economic

Structures, Springer, London.

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