U.S.+wholesale+prices+pushed+up+by+higher+energy+costs-+Wendy+L

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13 January 2011

Summary: This article published from gives an analysis to the biggest increase in wholesale prices in United States ever since last January (2010). This tremendous increase of wholesale prices were led by higher energy and food costs, etc. Compared to last year, the heating oil price increased by 12.3%, the cost of petrol increased by 6.4% and food prices also went up by 0.8%. Though this were the biggest increase compared to last year, the price only rose 0.2% from last month if excluding energy and food costs, compared to the 0.3% price rose in November 2010. In the year 2011, United States economy will still recover slowly but the rate of high unemployment will not slow down. Due to bad weather in United States in the past year, it led to a big rise in US energy and food costs. Vegetable price increased 22.8%, the biggest in wholesale prices in December 2010. This will create more burden onto residents living in United States. Since there grain products were at its highest price in the past two years due to the decrease in production of corn and soya bean. According to these statistics, Analysts commented the companies are still running under there full capacity, and the competition between two companies might be causing more burden onto themselves. Analysts and United States Central Bank encourages consumers to put off purchases where the cost might fall.

Vocabulary Terms: Price: Amount of money expected for a certain product that consumers can buy. Supply: The quantity supplied and the price it is being supplied Supply Curve: Shows the amount of good producers are willing to provide at different price ranges, ceteris paribus. Demand: The quantity demanded and the price it is being demanded. Demand Curve: Shows the amount of good consumers are willing to buy at different price ranges, ceteris paribus. Economy: A study to how best organize limited sources with unlimited wants. Factors of Production: Resources (Land, Labor, Capital, Entrepreneurship, etc) that produces good and services. Positive Statement: Something that can be proven with facts and observations. Macroeconomics: Study of economics as a whole, nation.

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Evaluation: I think this article gave alot of statistics and made its points very persuading. Though there was economic growth compared to January 2010 but the growth still cannot cure the problems United States facing as a whole (inflation, starvation and unemployment). The scarcity in factors of production, caused the price to increase for crops. This will cause more starvation in United States. The limited resources and bad weather caused little production of good and services. The amount of good produced cannot satisfy everyone's needs and wants. In general, the author predicted United State's macroeconomics in 2011. I think consumers should choose there opportunity cost so they would not spend most of there money on the needs. They should wait until price fallen a bit and then start buying the products again. If I corn was my first choice, then instead of buying corn I will choose my opportunity cost.