Microeconocs Essay Example | Topics and Well Written Essays - 750 words

Microeconocs - Essay ExampleThis supply catalogue is usually represented by relationship among market price and amount of goods produced. On the other side, demand is defined as the willingness and ability of a consumer to purchase a given product in a given frame of time (Clasquin 24). This schedule represents the amount of goods that consumers are willing to purchase at different prices as long as everything else body the same. While there are numberless different markets that vary from country to country, there are a few producers that find a demand throughout the world. one and only(a) of these is the demand for crude petroleum, with almost all machines depending on the energy it provides. The production and consumption of embrocate makes for a perfect example of how supply and demand works.One of the largest and most well known crude oil producers is The Organization of Petroleum Exporting Countries (OPEC). This organization ties together the biggest oil producing countr ies in the world including Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPECs influence on the market has been widely criticized. Several members of OPEC frighten the world and triggered high inflation across both the developing and developed world when they used oil embargoes in the 1973s (Clasquin 24). OPEC has weathered the ups and downs of supply and demand like no other producer has because the demand for oil in todays fluctuating market is constantly changing.With the worldwide economical crisis currently taking over galore(postnominal) parts of the world, the demand for oil has been significantly reduced. For years, the worlds oil surplus was negligible. This year, OPECs spare capacity is expected to mickle to around four million barrels a day, according to the U.S. Energy Department. In 2009, global oil demand will fall by 800,000 barrels a day -- the sharpest retreat since the recession of th e beforehand(predicate) 1980s, the Energy Department predicts (King A.6). This sharp decline in demand can be directly link to the pocketbooks of everyday citizens. A massive amount of the demand OPEC sees comes from everyday citizens needing oil to power their cars. Many of these citizens are losing jobs and feeling the crunch due to economic stress. They have less spending bills and are gummy only to necessities. In this case, less spending money means less demand. For example, citizens have less money to spend on leisure activities which almost always require some kind of transportation to and from. It seems that muckle are driving only to and from work, sticking to their homes and surrounding neighborhoods in their time off. People cant afford to go for vacations, depleting the demand of oil ask to operate airplanes, and an allover tightening of pocketbooks is restricting the amount of work needed to be done by the machinery using oil as a power fuel.Therefore, with all o f these factors lining OPEC, they have announced that the groups largest supply cut, --2.2 million barrels a day - after pledging to cut two million barrels a day in the autumn, when the slowdown began to take hold (King A.6). Global economic stress has stalled OPEC actions along with signs ofa weakening energy demand. At the end of 2008 reports of crude oil stocks rising in cost and falling retail sales in the U.S. were driving oil prices down.