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Unformatted text preview: Microeconomic Issues: 1. Everyone's Gasoline Problem. Fluctuation of gas prices at the pump are due to many different reasons. A couple reasons are: supply of crude oil, worldwide demand, and the value of the US dollar. " Supply of crude oil- The majority of crude oil that's refined to make gasoline is produced and sold to other countries by Oil Producing Exporting Countries (OPEC). This cartel of 12 countries in Africa, the Middle East and South America uses a loose quota system to determine how much oil to produce and sell, and one of its goals is to ensure the stabilization of oil prices by eliminating unnecessary fluctuations. However, OPEC production, pricing and distribution decisions dramatically influence the price of international oil, and consequently, the price of gasoline. Worldwide demand- The demand for crude oil in developing countries, such as China and India, has risen due to population growth, increased trade, growing internal markets and strong commodity prices. According to a recent population growth, increased trade, growing internal markets and strong commodity prices....
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This note was uploaded on 08/15/2011 for the course GM 586 taught by Professor Professor during the Spring '11 term at Keller Graduate School of Management.
- Spring '11