In a tight market, big demand for used cars drives up prices

http://www.boston.com/business/articles/2009/06/05/demand_for_used_cars_jumps_dealers_
confront_shortage/


Summary
  As the economy is still slowly recovering from the recession, many consumers tend to spend less on luxury products like cars. Used cars, instead of new cars, become more appealing to many consumers. This leads to a high demand of limited supply of used cars, which drives up the prices of them. In May, Americans purchased around 4 million used cars, which is a rise of 23 percent over April. Car dealers are facing a shortage of used cars because of several factors: fewer consumers are trading in their old cars for new cars; the number of repossession is decreasing; and car rental companies are holding onto their cars for a longer period of time.  Many owners of dealership that will be closed by GM and Chrysler are planning to open their own used car dealerships, which would increase the competition in the auto market and potentially boost up the prices further more.


Connection
  The high demands of used cars are due to the change in price of its substitute products, which are new cars. New cars are elastic products and consumers react strongly to them. When the cost of new cars take up a huge percentage of the consumer's budgets, consumers are more likely to purchased used cars. In the opposite hand, used cars are decreasing in supply. As more and more consumers purchase used cars, fewer amounts of used cars will be available in the market. And this leads to higher prices of used cars. Overall, the increase in demand of used cars results an increase prices and increase quantity exchanged, which means you can get more with more money.


Reflection
  In my opinion, car prices will still be staying around the same level in the next few years. However, as the prices of gasoline, which is a complimentary product of cars, keep increasing, it will eventually cause a decrease in demand of cars. Since not everyone can afford a car, I think that some car dealers should lower the prices of their cars. The reason for that is many cars do not really worth that much, and car dealers are just hoping to make a huge profit from them. If I want to purchase a car, I would buy a used car instead of a new car because they are cheaper and have a lower depreciation. I think car dealers should decrease the prices of their new cars because cars are elastic products. If car dealers do decrease their prices, they can get more revenues in exchange.

Fuel prices increase as scarcity bites

Fuel prices increase as scarcity bites   http://www.monitor.co.ug/News/National/-/688334/1010300/-/cnqbtez/-/

Summary:

Followed by the water scarcity, the fuel scarcity hits several cities in Kampala. Several Shell and Total gas stations were turning away the motorists that were seeking for fuel, because the insufficient of fuel. The Managing Director of Total Uganda Limited stated that the lack of fuel is due to the delays of offloading petro supplies.  As the supply of the fuel decreasing, and the demands of petro increasing, the price of fuel rises. Both Shell and Total increase their pump price from Shs 2,950 to Shs 2,980. Many other less-known fuel stations were trading fuels for even a higher price than Shell and Total Entebbe.  However, there is no a notable increase in transport fares yet. If the situations remains the same, the price of the fuel will eventually goes up to Shs 3,000 and it will led to the rise of price of transport fares. Other towns like Gulu, Mbarara and Kabale, had also been hit by the shortages of fuel. The prices of fuel in those towns had also been raised up to between Shs 2900 to Shs 3000.

Connection

 The scarcity of oil has been an increasingly severe problem for countries in Africa. In the text, it says only air and sunshine are not scarce resources, therefore, they are free. The statement also indicates gasoline is facing a shortage in the future. There are limited oilfields around the world to supply our huge amount of automobiles. As years elapse, there will be less and less gasoline. The shortage of oil limits the supply in the market, which will directly lead to the rise of gasoline price. In the other hand, scarcity decides the price of fuel. In the future, the demand of fuel will rapidly increase and the supply of fuel will slowly decrease. It is important for us to make a good use of it.

Reflection:

  In my opinion, petro is one of the scarce resources that will be facing a great shortage in the future. This shortage will have a great impact on different industries and our daily life. We might run out of gasoline for our cars, or we might have to pay an extremely high price just to get a litre of fuel.  As technology improves every year, more and more products start to be environmental- friendly due to the awareness of pollution. This concept should considerably used on automobiles more often. All the cars should have solar energy pads on their top. By converting sunlight, which is not a scarce resource, to energy, we can save more petro and money.