Blog #2

Recent Gas Shortages Due to Hurricane Ike

An economic shortage is defined as an excess of demand for goods or services, and less of the amount of goods or services available. Economic shortages are usually related to price. However in the case of the recent gas shortages related to Hurricane Ike, there was a situation in which people were unable to find gas at a reasonable price, due to the spike in gas prices prior to Hurricane Ike.

There was evidence of a shortage , due to long lines at gas stations, and many gas stations were running out of gas. Gas stations were pressured to hold prices steady, despite the increase in demand, so naturally a lot of gas stations ran out of gas. People were frantically running to the pumps, because of the rumors of a spike in gas prices or an overall shortage in gas.

Because so many people were buying more gas than usual, the gas stations ran out of gas, and those that didn't, increased the price so much, that gas was hardly affordable for the average household. Had gas stations been able to rise prices accordingly, shortages would have been reduces, and only the people that really needed gas would have bought it.

A good portion of economic is how society distributes scarce resources. If everyone with the notion to fill up their half-full gas tanks, just to be "safe" had not done so, there would not have been such a shortage, and the price of gas may not have risen so much. Less supply and more demand equal higher prices. When everyone run out to gas stations, this causes a massive increase in demand, and all because there were "reports" of less gas being available, due to a hurricane that had not even made landfall yet.