Topic 5: Ripple Effects and Elasticity

Topic 5: Ripple Effects and Elasticity
Oil is used throughout the world in many things, its not only limited to oil for cars and trucks and planes, but is also used in things like asphalt and plastic. This causes many other industries to increase their prices which will cause a ripple effect and spread out to the rest. It may not have originally have had a direct correlation with oil, that industry or product will also become involved with this change. My family used to own a car and the price would make us use less gasoline which meant going out less and less. Another good that is like this is corn. Elasticity is that when prices increase, the quantity will change, however for many of our basic everyday items that we use, these products are a necessity to our every day life and are inelastic. No matter how high the prices rise, we will still continue to purchase them. Some goods that I consider elastic are biendawns, because I can just go to another place to get it, or eat another kind of food. I consider sugar to be inelastic, I consume it everyday and it only increases by very minor amounts, but no matter how much it increases for the most part, I will still buy products that contain sugar.