1.In the period leading up to the war in Iraq, oil prices increased significantly, as did the profits earned by many oil companies. Some politicians argued that these profits were undeserved, and they called for price rollbacks and/or increased taxes. Discuss the pros and cons of these proposals in the context of the various theories of profit.
- 1 0 年前最佳解答
Oil has always been traded as commodity in the future market. Crude oil purchased previously will be sold for future domestic consumption. One can argue that there is little control over the oil companies in terms of price control thus more control should be imposed on the companies to maintain the reasonable price range. However, there are some pros and cons toward the solutions suggested by the politicians and these factors will be discussed as below:
Pros:Price rollback can help slow down inflation and therefore help the growth of economy. With the price rollback, consumer can enjoy more spending power they did not have when the oil price is high. It can also stimulate the production as most manufactures rely on various oil products for their productions.
Cons:Most of the oil companies are privately owned and therefore profit is the major drive of their business. Without attractive profit gains, the oil companies may lose their incentive of investing in supplying petrol to consumers in the long run.
Pros:Increasing tax on the oil can increase the government’s revenue. The revenue increase will enable a government to explore other alternative energy, therefore reduce our dependence on oil. Moreover, with tax increase, the consumption will in terms reduce accordingly which will drive down the oil price respectively.
Cons:Increased tax means higher oil price. Oil companies will certainly pass the tax increase to consumers. In other words, not only do consumers have to suffer for the already high oil price, they are also forced to bear the pain of tax increase. In other words, higher tax translates into higher oil product price. As most manufactures rely heavily on oil products for their productions, higher cost have to be calculated into sales price. Inflation will then follow as a result. Economy will be hurt accordingly.
My opinions, hope it helps. Didn't have much time and space.
- 匿名使用者1 0 年前
As oil prices rises, the prices for other merchandises follow it which gives an opportunity for inflation to occur. By lowering the price of oil, people will be able do more with the same amount of money and companies will benefit from less opportunity costs. But while the pros may sound quite attracting, the cons seem to overwhelm it. As we know, there are high demands for oils throughout the world and within couple decades we may face a shortage of oil. If we lose Iraq, a country that is in the tops when it comes to supporting oils for countries all over the world, it will only quicken the time for this problem to occur. As the oil prices rises, many people begin to carpool around places more often and the demand for electronic cars increases; Mother Nature can benefit greatly from this. Although it may seem like oil companies are trying to benefit from this war, but in reality they are only taking necessary actions to prevent more problems to occur.