ryan-econ - Tumblr blog

[ryan-econ]

Econ Live 

Ryan Armijo

Student ID: 66909246

Monday 3:00 to 3:50

One economic concept that applies to my daily life and was significantly impacted by the pandemic is the price elasticity of demand. Price elasticity of demand refers to the responsiveness of the quantity demanded of a good or service to changes in its price. In the case of gas, the price elasticity of demand is typically relatively low, meaning that price changes have little impact on the quantity of gas demand. However, during the pandemic, the price elasticity of demand for gas increased significantly due to changes in consumer behavior. With lockdowns and travel restrictions, many people were no longer commuting to work or traveling as frequently. As a result, the demand for gas decreased significantly, causing prices to drop. In addition, with many people facing economic uncertainty and job losses, less disposable income was available for non-essential purchases like gas. The decrease in demand for gas had a ripple effect on the economy as a whole. Many businesses in the gas and oil industry were forced to shut down or reduce production, leading to job losses and decreased economic activity. In addition, many companies that rely on gas for transportation or shipping also experienced disruptions and reduced revenue.

In my personal life, the decrease in gas demand during the pandemic significantly impacted my daily routines and spending habits. For example, my mom, a teacher, did not have to drive to work due to the pandemic and taught her classes on zoom. Similarly, I did not have to go to school since classes were online. With fewer opportunities for travel and commuting, I spent less money on gas and transportation overall. I also shifted my spending priorities towards other goods and services that were more essential during the pandemic, such as groceries and household supplies. Overall, the pandemic had a profound impact on the demand for gas and the gas industry as a whole, highlighting the importance of understanding the price elasticity of demand and how changes in the consumer behavior can have far-reaching economic effects.

Citations:

Branch, William A. A (gentle) Introduction to Microeconomic Theory. University of California, Irvine Irvine, CA USA, 2023.

Rubaszek, Michal, et al. “The dynamics and elasticities on the U.S. natural gas market. A Bayesian Structural VAR analysis.” Energy Economics, vol. 103, 2021.

Smith, L. Vanessa, et al. “Assessing the impact of COVID-19 on global fossil fuel consumption and CO2 emissions.” Energy Economics, vol. 97, 2021.