Oil closes in on $75 as the U.S. dollar weakens further; Retail prices up

Oil closes in on $75 as the U.S dollar weakens further; Retail prices up
http://ca.news.yahoo.com/s/capress/091013/business/oil_prices


Summary:
The slightly risen gas prices in U.S last week was because the weakening of U.S. dollar. The gasoline price had been rised by two cents to US$2.489 per gallon. Gasoline prices in Midwest rose especially quick, but the price of gasoline was still so low. In Canada the average gasoline price is 95.9 cents per litre. Because of the increasing gasoline price, consumers will begin to weighing what they need more for their daily life, for example they will choose between the colder weather or the higher gasoline price in winter. Also, the Refiner are going to take facilities off line, which means they will produce less fuel since less people will be using it.


Connection:
This article linked with Chapter 2 the Operation of a Market. They link because this article is about the commodities market. while the exchange rate for U.S dollar is droping, the price of gasoline will start to increase. This article also link with the demand & supply factor and inelastic & elasticity. When the price of gasoline increases up to a certain price, the demand of gasoline will decrease, then gasoline will become an elastic product. At the same time, the supply of gasoline will decrease in slower motion and will eventually reach equilibrium again.


The connection between this article and Chapter 2 is because gasoline is a necessity which help us operate many of the machines that use in our daily lives so there will alwasy be a constant demand for them. Also, the article told us that the gasoline price will become higher in the world market. It mentioned in the article that the refiner will start to make less fuel since the price going up, which means the total demand of gasoline will start to decrease, which related to one section of this chapter " change in demand".


Reflections:
After i read this article, i think that since the oil price is increasing, more people will take buses instead of driving cars, especially we are still facing the economic depression problem, less cars means there will be less pollutions then before, which will increase the living condition of our enviroment. In the other hand, the demand of gasoline for home use car will decrease but the demand of gasoline for public transit will increase, but the total demand of gasoline will decrease. At that time, the gasoline price will decrease to attract people to use more.

AbitibiBowater to suspends at several plants, affects 1,500 jobs in Canada

AbitibiBowater to suspends at several plants, affects 1,500 jobs in Canada (redo)
http://ca.news.finance.yahoo.com/s/17092009/2/biz-finance-abitibibowater-suspends-several-plants-affects-1-500-jobs.html/

Summary
A Montreal-based company, AbitibiBowater, has to stop its production at several facilities due to its financial problems. Aside from stopping production, as much as 1500 jobs will be affected due to the outcome of this decision. The reason for this decision is because of the lessening demand for newsprint. A spokesman for the company said that the demand for newsprint has dropped as much as 30% within a year. Along with many forestry industries in Canada, AbitibiBowater has been greatly affected during the recession. An attempt to restructure the company would be difficult since AbitibiBowater is operating with little profit while carrying a huge debt load.

Connection
This article links with chapter 1 "Introductory Concepts" in the economic text book because the decision made by the company directly affect their oppotunity cost. Opptunity cost is the next best choice that someone has to give up when pursuing their desired decision,for exaple,wages expense. In this case, when Abitibibowater is facing financial crisis, they had to lay off their workers in order to reduce the expenses icurred from production. By choosing this decision,AbitibiBowater has forsaken the alternative of increasing production levels in hopes of stimulating sales which might have been the next best solution to help them recover from their financia crisis.


Reflection
When economy went into depression, a lot of company will cut jobs to keep their company running. When workers get lay off because of the depressions, they will start taking out their personal savings to help them buy goods and services, but they will reconsider before purchasing goods. On the other hand, the sales rate for psp, ps2, wii,and any other luxury items, which are considered want for their life, will decrease. By the time their sales rate decreased a lot, they will start to lower the price to promote their products. In conclusion, the price of products will decrease, and the interest rate of savings will increase because the bank need people to save up moneys in order to invest other business.