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Gm 545 Project 1
Jonathan Wiggins
Business Economics GM545
July 2013 jwiggin3@gru.edu Exercise 1: Everyone’s gasoline problem

Gas prices fluctuate due to oil prices and the anticipated supply and demand worldwide. Whenever there is political unrest in a major oil producing country you will see an increase in gas prices due to the demand of oil potentially produced decreasing. Very rarely do gas prices follow the general supply and demand because if they did gas prices would be lower currently. In my hometown of Augusta, GA gas prices are always below the national average and with us bordering South Carolina many Augustans travel the short distance to pay lower prices in South Carolina which are usually $0.10-$0.15 cheaper. Much as the rest of the world goes whenever there is a threat to the supply of oil, regardless of having a surplus currently, the gas prices in this area see a $0.10-$0.20 increase sometimes within a 30 minute period.

Chapter 3, Question 15
Based on these two events food prices in the U.S. will increase due to a diminished supply. Other suppliers of oranges will have more of their supply purchased however it won’t do much as far as keeping prices low. The same holds true with corn prices with some of the supply of corn going towards the production of ethanol. However, unlike the oranges, corn supply will affect almost all food from meat prices to other products that use corn while being produced. As a result of this decrease in available supply of corn, food prices across the board are up.

Chapter 7, Question 15
These costs are fixed costs and companies care about them because they are exorbitant and there is no way to reduce the costs on a year to year basis. The regulations are so strict that those companies who aren’t behaving unethically are spending extra money to be compliant because of those few firms that have ruined things for everyone. NASDAQ and the NYSE will eventually, in my opinion, have to merge with foreign stock markets since

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