Forex Forex Forex Forex – Forex Learn

Elasticity of demand is also a factor underlying certain social problems, a good example of which is the low incomes of many farmers over the years. Farmers have advanced technologically, raising productivity and the total output of farm products, only to fine themselves in a difficult position economically. While the increased output has depressed farm prices, the lower prices have not led to increased sales of farm products, because the demand for food is inelastic: people do not buy much more food just because it is a bargain. Thus, farmers received lower prices for their crops, but were unable to sell more crops to offset the lower prices, leaving them with low incomes. This is not a new problem for farmers; it has been with them for centuries. For instance, in the seventeenth century, Gregory King, an English writer, remarked that when there was a good harvest, farmers actually received less than when the harvest was poor. This latter observation is the key to farmers’ ability to overcome their problem: while they cannot control the size of the harvest, some of them are able to control how much of it reaches the market. Thus coffee producers in Brazil band together to burn part of any large crops they have, so as to secure higher prices and, due to the inelastic demand for coffee, higher total revenues. However, many other groups of farmers have had great difficulty uniting in this way, and have suffered low incomes as a result. In Canada recently, government-sponsored marketing boards have played an increasing role in organizing reductions in farm production and increases in farm incomes.

A final important (and interesting) example of elasticity of demand is provided by the oil crisis. As Canada entered the 1980′s with crude oil prices less than one-half world price levels, a major debate occurred over whether higher prices would significantly promote oil conservation by reducing oil usage by Canadians. While most Canadians seemed to feel at that time that higher prices would not significantly reduce their use of oil, the matter is not that simple. While oil use may be reduced very little in the short run by higher prices, over the longer run the demand for oil seems to be less inelastic. Given time, people will switch to smaller cars and insulate their homes in response to higher prices, and industries will convert to more energy efficient production methods. Some evidence in this area is provided by comparisons of the USA and Canada: from 1972 to 1978, the economy in the US (where oil prices rose more rapidly) increased its energy efficiency by about 10 percent, while Canada (with slower increases in oil prices) increased its energy efficiency by only 4 percent. Thus, it appears not only that the demand for oil (and energy generally) may become more elastic as higher prices prevail over a period of time.

http://www.forexforexforexforex.com/

Furnasman Winnipeg

Furnasman One Hour Heating  CBC Winnipeg

Car Carrier

• Hedge Rising Food and Gas Prices with ETFs I've been following the financial news a little more lately than I have in past. I don't like what I hear. An interview with a Shell Oil representative is claiming we might be paying $5 a gallon in two years....
• .....ain't Gold A friend posted on usenet group misc.invest.financial-plan; DEMAND (for Gold) 71% 2950 Jewelry (mostly US, China, India) 7% 300 Central banks & industry 6% 250 Hoarding 7% 300 ETFs 3% 130 Coins 5% 200 Hedging reductions 4130 Total Demand SUPPLY...
• Deleveraging Is Not Deflation! I read a very interesting article on called De-leveraging is Not Deflation. Here's a partial extract: "Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation...
• What Happens When Demand for US Debt Dries Up? Over a year ago, I wrote about China threatening to stop buying US Treasuries. According to an article in the New York Times, it now looks like China is losing it's appetite for US debt : In the last five...