Economics: Short and Long Run Demand for Oil, Price Ceiling and Floor, GDP Components, Labor Force and Unemployment

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COURSE NAME
MASTER OF PROFESSIONAL ACCOUNTING
UNIT CODE
MA503
UNIT TITLE
ECONOMICS

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Table of contents
1.0 Introduction..........................................................................................................................3
2.0 Q 1........................................................................................................................................3
3.0 Q 2........................................................................................................................................4
4.0 Q 3........................................................................................................................................4
5.0 Q 4........................................................................................................................................5
6.0 Q 5........................................................................................................................................5
7.0 Q 6........................................................................................................................................6
Reference....................................................................................................................................7

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1.0 Introduction
Economics has two different parts which involves micro economics and the macro
economics. While the micro economics deals with the micro level economics such as the
buyer, seller, market and many more, the macro economics deals with the economics as a
whole. This paper answers few of the questions of economics.
2.0 Q 1
Although, the short run demand for oil is inelastic, the demand in the long run becomes very
elastic. In the short run, the consumers of the market do not have any other choice but to by
oil from the OPEC countries (Bober, 2016). Compared to that, in the long run, other oil
explorers have the opportunity to increase the supply of oil. Apart from that, in the short run
the consumers of the market also have the chance to change their buying pattern. They can
start conserving oil or use oil efficient cars in order to reduce the consumption in the long
run.
Figure 1: The Short run and long run demand for the oil
(Source: Emanuel et al. 2016)
Thus, the demand curve for oil in the short run is steeper than that of long run. Therefore,
when the member of OPEC reduces supply in the short run in order to increase the price, it
increases hugely increasing the overall revenue of the countries. However, in the long run,
the price increases by small margin and due to the elastic nature of demand for oil, the