A Report on Emission in Negative Externality and Price Elasticity of Demand of Petroleum

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A REPORT ON EMISSION IN NEGATIVE EXTERNALITY AND PRICE ELASTICITY OF DEMAND OF PETROLEUM

Prepared for:
Heng Kiat Sing
Course Leader of ECO MBA

Submitted: 6th Nov 2006

Prepared by:
Liu Yi (IBMS/0607/009)

EXECUTIVE SUMMARY

This report was authorized by the request of ECO5005 Economic of the Business Environment course leader, Heng Kiat Sing. This is to enable student to have a clear understanding on Externality, and Price Elastic, thus, enable to analyze price elasticity of demand of problem.

In the first section of this report, it mentioned concept of Global warming as well as Global warming. At second section, it leads into the explanation of Market failure, negative externality; it follows by price elasticity introduction and price elastic of demand in the 3rd section. At last, it conclude that emission which is negative externality to create global warming, furthermore, base on price elasticity of demand definition and calculation, it conclude Price Eelasticity of petroleum demand and petroleum Tax imposition.

TABLE OF CONTENTS
Page Executive Summary i

1.Introduction
1.1. Authorization1 1.2.Limitation1 1.3.Scope of Report:1 2.The body

2.1.Global warming2
2.1.1.Global warming overview2
2.1.2.Global warming affect2
2.1.3.Emission4
2.2.Market failure4
2.2.1.Market failure introduction4
2.2.2.Types of market failure5
2.2.3.Externality5
2.2.4.Implication6
2.2.5.Externalities in supply and demand8
2.2.6.Negative Externality8
2.2.6.1.Negative Externality in consumption10
2.2.6.2.Negative Externality in production11
2.3.Price Elasticity12
2.3.1.Price Elasticity introduction12
2.3.2.Price Elasticity of Demand12
2.3.3.Elasticity and Taxation Revenue13
3.Conclusion15

List of reference16

1.Introduction
1.1.Authorization:
This report was being generated by the request of ECO 5005 Economic of the Business Environment course leader, Heng Kiat Sing. This is to enable student to have a clear understanding on Economics of Business Environment, thus, enable to anlyze negative externality and price elasticity of demand of problem.

1.2.Limitation:
Some difficulties were being encountered when producing this report which it had affected this report to be not perfectly remarkable. Such as imperfect information obtained from internet and Textbook which are related to Tax.

1.3.Scope of Report:
In the first section of this report, it mentioned concept of Global warming as well as Global warming. At second section, it leads into the explanation of Market failure, negative externality; it follows by price elasticity introduction and price elastic of demand in the 3rd section. At last, it conclude that emission which is negative externality to create global warming, furthermore, base on price elasticity of demand definition and calculation, it conclude Price Eelasticity of petroleum demand and petroleum Tax imposition.

2.Body
2.1.Global warming
2.1.1.Global warming overview
The progressive gradual rise of the earth's surface temperature thought to be caused by the greenhouse effect and responsible for changes in global climate patterns. An increase in the near surface temperature of the Earth. Global warming has occurred in the distant past as the result of natural influences, but the term is most often used to...
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