Jacob Warren's Economics Blog

  Gas prices have increased by almost $1.50 in a year.  Since Putin's invasion of Ukraine, gas prices surged almost 80 cents.  The increase of roughly 70 cents that occurred before Putin’s invasion is largely due to people coming out the house again for travel, work and school, and the surge in truckers crisscrossing the nation to move goods. 1.  How has the Russian invasion of Ukraine impacted the price of oil? Increases the price of oil. 2. How has the increase in demand for oil as part of the recovery from the pandemic impacted the price of oil? The increase of roughly 70 cents that occurred before Mr. Putin’s invasion is largely due to people venturing out again for travel, work and school, and the surge in truckers crisscrossing the nation to move goods. 3. What countries could contribute to increasing the supply of oil produced? What would happen to the price if the supply increased? Saudi Arabia, the United Arab Emirates, Iran or Venezuela 4. What does the art...

Economic effects of the war are beginning to be felt in the markets for oil, gas, grain and even some strategic metals.  Lebanon and Egypt wonder if they will have enough grain to feed their populations.  Oil prices have swung wildly since the invasion, rising to above $130 per barrel and causing gas prices in the U.S. to hit their highest level ever.   1.  Why is it difficult for producers to adjust to the possible shortages of grains because of the invasion of Ukraine? Producers don't know if they will have enough grain to feed their people. 2. Where is Russia still supplying oil in the global market? Throughout Europe. 3. What are the main agricultural (farming) exports of Russia and Ukraine? Grain, barley, and sunflower oil 4. How can shortages of Russian fertilizer exports impact the production of other farming goods globally? It would make it nearly impossible to produce crops 5. How is this war indirectly impacting the costs of producing electric cars? It...

Dry cleaners are beginning to close down as the pandemic continues. Some trade groups expect by the end of the year that 30% of dry-cleaning businesses established before the pandemic will close. These dry-cleaning business owners fear that consumers may never return. 1.  What is causing the change in demand for dry cleaners? Knowing this what would we predict would happen to the price of remaining dry cleaning services? The pandemic. The prices would go down 2. What percentage of dry cleaners are expected to close by the end of this year? What would happen to the supply curve for dry cleaners if this many close? 30%. Shifts to the left, because supply decreased 3. What changes in business norms were already hurting the dry cleaning industry? Store owner's  U.S.-born children were choosing not to take over the family business, opting instead for white-collar fields. O ffices were loosening their norms for professional attire and lessening the need for professional cleaning. ...

The U.S. economy added 467,000 jobs in January despite the surge of the omicron variant. This caused the unemployment rate to increase from 3.9% to 4%, because more people were looking for work. Over the past 12 months, the US has added nearly 7 million jobs. Why does the article say that the unemployment rate increasing from 3.9% to 4% is a positive trend? Because more people are looking for work. Despite some positive news for the US economy, what problems is the economy facing? Closing schools, day cares and a number of businesses. What was wrong with the earlier estimates of job growth from reports in November and December? The job gains doubled what was predicted Which industries were the source of the largest numbers of new jobs? Why do you think those industries are improving? The leisure and hospitality sector. Restaurants and tourist areas are starting to open back up. How are unemployment rates different for white and black workers? The black employment rat...

The pandemic made many fitness-minded companies very wealthy, but few benfited more than Peloton. But over a month ago, their company's shares lost more than a third of their value after dimishing sales. This led to Peloton slashing nearly $1 billion off its revenue projections. Hordes of Americans setting aside their home-based workout routines and heading back to the gym caused this decline. 1.  How much revenue is Peloton expecting to lose this year? What has happened to their stock price as a result? $1 billion. The stock slumped 35.4%, to $55.64. 2. When sales of Peloton bikes first started to decrease, how did the producer respond to try to increase purchases? Companywide hiring freeze. Cut 20% off the price of its signature bike. 3. How do sales of home fitness equipment in 2021 compare to 2019 sales? What's the main reason for this increase? Home fitness equipment sales in 2021 are 100% more than 2019, because people were in a global pandemic.  4.  Let's predict h...

The extended benefit, which was a part of the Biden administration's American Rescue Plan passed last year, distributed nearly $300 per child every month to millions of American families starting in July. This only lasted six months before it expired in late December. Many critics claimed the expanded credit was not focused enough on families in need. Proponents say it had an immediately positive impact by decreasing child poverty rates by around thirty percent each month. Without this, nearly 10 million children could fall deeper into poverty. 1.  How did the American Rescue Plan help families with children? When were they getting these benefits?  Helped pay for children's necessities. Beginning in July last year and ending six months later 2. What impact did this program have on child poverty? cut the child poverty rate by 30% each month.  3. Why did critics think that this program was bad for the country? Parents could stop working and live off this program. 4. How did...