Business Economics – Assignment 1
THE IMPACT OF THE RISING
GAS PRICE
Based on the article “Gas Prices Rise, and Economists Seek Tipping Point”
by Christine Hauser (April 11, 2011).
Lecturer: Barry Harrison
Student Name: Veronica Giunta
Date : 10/12/2013
Introduction
This paper is based on the article “Gas Prices Rise, and Economists Seek Tipping Point” by Christine Hauser
(April 11, 2011).
Gas prices are approaching record highs, but so far most Americans do not appear to be drastically
cutting back their driving or even their spending as they did in 2008.
The question, economists agreed, is what happens if prices continue to go up and remain high.
Prices for a gallon of regular unleaded gas are topping $4 at more service stations nationwide,
revisiting the bleak territory of three years ago, when the average price for a gallon of regular gas
reached a peak of $4.11 on July 17, 2008, according to the Oil Price Information Service.
The survey of about 100,000 stations showed gas prices were now averaging $3.77 a gallon
nationwide. The average is already more than $4 in California, Hawaii and Alaska, and analysts at
the oil information service said drivers were paying more than $4 at some stations in at least three
other states — Illinois, Connecticut and New York.
The government’s Energy Information Administration on Monday put the average price for a gallon
of regular gasoline slightly higher at $3.79, up 10.7 cents from the previous week and nearly a
dollar higher than the same time last year.
Even with the higher prices, economists said recent broad data had continued to be positive.
The labor market, for example has continued to strengthen, with the economy adding 216,000 jobs
in March. And a survey of 25 retailers tracked by Thomson Reuters posted a 1.7 percent increase
that same month, contrary to analysts’ forecasts.
But economists are still trying to determine the longer-term economic impact.
“Once we cross the $4...