Economic Practice Coursework Essay

My choice of article is the one relating to the oil crisis in Libya, and how it affects the providence of otherwise countries. The article discusses the impacts of the oil skip of Libya, supplying it no more. It starts off by talking about the impact on sh ars and the price of oil barrels, which is the fast-paced and direct impact of the oil cut.As supply from Libya territory stops, supply to the entire world is crippled, as Libya is one of the countries that supply most worldwide employ oil. As it stops supplying, it shifts the supply and demand graphs completely. In a short term, supply shifts to the left, as it is less. In doing so, for the same amount of oil, the price has gone to a higher figure. By doing that, the shares index of the western countries, such as European countries and the US have dropped, because of the adjustment via disposable income.That happens because of the effects of the shifting of the supply curve. As the price goes higher, the general public have less money to spend on the economy and firms, decreasing the firms profit, damaging that countries economy. Thats the priming coat for the index to go great deal, and thats an example of mid-term effects of the oil crisis. In the midterm effect, the demand for oil will decrease, as people will cut back on the oil, and look for ersatz routes.On the long term, the demand for the cars will decrease, as people will not want to buy cars, and accent to sell their cars. This will affect the economy drastically, as the car companies are a big part of that countries economy. The general public will search for alternative routes to travel, as oil prices are higher. The car companies will have to spend oft more money on researching alternatives such as hybrids and electric cars which are starting to appear.The public transport system will benefit from this situation, as more people would want to travel via train or bus, as it is much cheaper and faster. The government would get more money from this, so it would improve as much. The oil companies would want to drill and search for oil in more contrary areas, causing more deforestation, and much more money spending by the companies and time. Thus some small oil companies will be closed down due to the high demand of oil, as they cant compete with the oil monopolies.The oil monopolies will also be affected, as some major(ip) companies oil supply relies a lot on Libyas supply. Regarding the oil companies, they had to pull out staff from troubled countries, not only Libya, but other countries that are getting affected by that state, and are choosing to cut off supply as well, such as Saudi Arabia and Kuwait. As they do this, the productiveness drops to zero in those countries, and there is a high chance of the companies losing contact with their oil.The unrest in Libya may affect the Saudi Arabia, and that concern is affecting a huge majority of stock holders and companies, specified before, changing the stock markets, especially the European and Asia. Relating to airlines, as the supply and demand graphs change, the oil supply for airplanes gets crippled, so more money has to be spent to get the same amount of oil, making the costs bigger, resulting in a bigger price for the customer for the same feather compared to before the whole situation. There is also a chance of investors backing out from the airline business, resulting in smaller profits for the companies and much more pecuniary issues.