Would you rather have the forces of demand and supply determine the price of gasoline which you pay at the pump, or would you prefer a government mandated price ceiling?

The Price of Gasoline

In essence, it is a practice ground for ensuring that your economic reasoning and foundation are secure. This portion of the course requires you to interact with your fellow classmates. Please address these discussion questions below. Make sure to analyze the questions using an “economic perspective.” In other words, utilize economics vocabulary in each of your posts.

Would you rather have the forces of demand and supply determine the price of gasoline which you pay at the pump, or would you prefer a government mandated price ceiling? What problems would a price ceiling on gasoline bring?

There are two different schools of thought on how to lower gasoline prices and reduce US dependence on foreign oil.

1. Increase SUPPLY of oil (drilling offshore)
2. Decrease DEMAND (finding alternatives to oil).

Think through how you might graph how these two changes will bring about lower gas prices. Which school of thought do you subscribe to?

Pump more oil

National Public Radio: Bush Calls on OPEC to Pump More Oil (Links to an external site.)

Offshore drilling

USA Today: McCain pushes offshore-drilling plan (Links to an external site.)

Greener than thou

The Economist: Greener than thou (Links to an external site.)