Chapter 2 Media Article

"Gas Crunch Hits home"
-24 Hours October 5th, 2005-

With oil prices soaring through the roofs nowadays, people are turning their attention to new and environmentally-friendly alternatives for their means of transportation. According to the 24 Hours, more people are willing to spend money on expensive hybrid cars rather than to spend money on gasoline for their SUVs. The reason? Since the declaration on the War on Iraq, along with the recent devastation of hurricanes, and the increasing demands of oil by China, it seems that the oil prices can only go higher in the future. Ironically, it was the war on Iraq (which advocated more extraction of oil) that started this trend of environmental and fuel-efficient cars.

Relation to Chapter 2 – Supply and Demand, Elasticity

With new Hybrid technology available, more car owners are abandoning their “monster trucks” (referring to big and inefficient vehicles, like SUVs). Popular cars like the Volkswagen Beetle and Honda Civic Hybrid are becoming more commonplace on the streets. This new trend, also known as a change in supply and demand, is vital to ensure the survival of our natural resources from belligerent world leaders in the near future. According to the 24 Hours, manufacturers (namely Toyota) are supplying more hybrid cars onto the market. Not only so, the demand for these cars is increasing as well; however, because cars are considered to be and “elastic” product (economically speaking), the demand for different cars fluctuate according to its number of close substitutes (in this case, very elastic). Will hybrid cars become our transportation-of-choice in the future? It all depends on the consumers; “Consumers Are The Kings”.

Chapter 1 Media Article

"The Power To Change"
-The Economist September 15th, 2005-

This article deals with the scarcity of energy resources that Britain will face in the next decade. Unlike many industrialized nations, Britain has always been self-sufficient in producing its own energy. That will change in the upcoming years, however, as factors such as the intervention of environmental organizations and the deterioration of current infrastructures continue to escalate in numbers. In order to counter these issues, Britain is attempting to replace these aging power plants with renewable energy resources.

Relation to Chapter 1 – Scarcity, Opportunity Costs

Britain's energy resources come from the North Sea. As supplies decline, Britain will be forced to import energy from other nations. This scarcity of natural resources is a major factor that will determine Britain's international status. Since Britain can no longer fuel its industries with unacceptable coal power plants by 2012 (they need expensive chimney-scrubbing equipments), many opportunity costs will have to be considered. For example, the money that could have been used for something else will need to be contributed to creating new and environmentally-friendly power plants. In addition, it will be catastrophic for the mining industry, because many qualified skills-men will have to be displaced (the time wasted while being unemployed is an opportunity cost). Moreover, the cost of building and maintaining a nuclear power plant is costly (nuclear energy is Britain's idea of a "renewable and environmentally-friendly" resource). With energy prices soaring nowadays, and new regulations being implanted regarding the type of resources being used (by 2012), will Britain become the new Albania*?

*Albania has petroleum supplies, but cannot extract them. Britain has coal supplies, but cannot use them. Albania is very poor (economically speaking), and Britain may soon be poor as well.

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