Everyone’s gasoline problem

The fluctuation in gas prices can be caused by many different reasons. One reason has to do with the economic growth of other countries and their demand for oil. Just like the book says, as demand for a product rises than the price for that product will do the same. Countries like China, India, and Brazil are making an economic growth that’s required more and more energy. Because most of the world’s oil comes from the same place, their growth impacts our gas prices as well. http://www.financialnut.com/why-are-gas-prices-rising/ Here is a chart of what is the Dow Jones Industrial equivalent for Brazil. This chart shows that Brazil has reach a very high economic growth and are at a point where their demand for energy is extreme as well. Other factors that play a part is the fact that gas prices rise and fall as crude oil does.

http://gasbuddy.com/gb_retail_price_chart.aspx
This chart shows average retail price of oil and gas in Houston. This shows a direct correlation between crude oil prices and the prices we as consumers pay for gas. As crude oil rises and falls so too does the gas prices. Oil and gas is an inelastic commodity. This is why the demand for gas hasn’t really diminished while the price of gas has risen.
Because it is difficult to reduce spending on gasoline, the effects of price increases are often shifted to other economic sectors. Some economists estimate that for every one cent increase in the price of gas, spending in other areas will decline by one billion dollars. This figure does not appear to be based on recent empirical data, but it is clear that gasoline prices significantly affect consumer spending. In 2007, Wal-Mart estimated that the then current higher gasoline prices take away $7.00 per week from an average family budget. Since then, this figure has certainly increased significantly. The problem is