Obama+to+speed+oil+and+gas+drilling-+Damian+Lee

Article: Obama to speed oil and gas drilling Source: yahoo [] Date: 5/14/11

Brief explanation: This article is explaining what Obama is trying to do to reduce inflating gas prices. By increasing domestic oil production from oil plants located in Alaska, it will raise oil supply and move the supply curve to the right, decreasing the price of oil. Because oil is such an integral part of modern day life, the government would hope to keep oil prices as stable and low as possible for everyone to use it. Since there are often only little changes in the price, it can be defined an inelastic good, or a good with a PED less than one. Although the U.S is currently depleting its oil resources even faster, it is their way of achieving sustainable development, because they hope to only temporarily suppress oil prices until they can find a renewable resource. This is also a type of buffer stock scheme, where the government is increasing supply and setting a price floor so that the price of oil will hopefully not exceed the maximum price and stabilize.

Vocabulary: Buffer Stock Scheme- A n attempt to use commodity storage for the purposes of stabilising prices in an entire economy or an individual (commodity) market. Commodity-a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. Inelastic Product- A product's whose price elasticity of demand is lower than 1, and therefore a necessity Demand-The need for a good or service Supply- The quantity of a good or supply offered Sustainable Development- A countries economic development that will ensure that future generations' resources will not be in jeopardy Opportunity cost - the value of that which must be given up to acquire or achieve something

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Evaluation: I think Obama made the right choice for the United States economically. Because the US is still suffering from a post recession period where income of the people is generally not very high, by lowering the price of oil, a necessity for everyone, this will allow people to spend more of their income on other goods, slowly and steadily driving the economy back to a better status. The interesting thing is that although Obama previously introduced a clean energy program, this is an entirely different plan heading in the opposite direction as it will deplete oil resources even faster. However, I think this is a good plan, as it is solving the economic and oil concerns, which will allow the US to work on its renewable energy program without any worries of the economy suddenly collapsing, which will cease all funds to the research.