Economic Presentation

Economic Presentation

Economic development depends on the available resources in a country and whether the country utilizes the resources, in the present world the most commonly used resource is crude oil, due to high demand and the lack of a close substitute crude oil prices have risen from time to time, when the prices of crude oil rise they affects an economies macroeconomic stability in that it brings about inflation in the entire economy in that every sector of the economy directly or indirectly depends on crude oil as an input in the production process.

In my presentation I analyze the future of the use of crude oil, crude oil if finite in nature which will one day completely finished, but this will not be the case in the future because of the following reason.

In the 19th century whale oil was the major source of lighting in Europe, however when the population of Europe tripled in the 1860’s the price of whale oil increased by 400%, this was as a result of increased population that made the demand for whale oil to rise beyond the equilibrium supply level.

The price increase led to whalers to become more aggressive in trapping whales and the entire whale populations become endangered in that it was close to extinction.

As the price of whale oil increased people started to look for an alternative cheaper source of lighting and in 1987 paraffin was discovered and the price of whale oil collapsed and whalers become bankrupt.

Economic Presentation

From the above explanation we can conclude that there should be a free market economy without government interventions, whale population was an endangered species but through the supply and demand forces they were saved from extinction, the crude oil prices will in the future collapse when man finds an alternative source of energy.

Therefore the economy should always be a free market economy and that resources should be left as they are and should always be preserved for the future generation because resources are not they become

Whale oil prices in the 19th century (2004) retrieved on 16th April, available at

http://www.energybulletin.net/3338.html