Aired August 26, 2003
Just in time for Labor Day Weekend, gas prices have jumped to a record-high level. The average gallon of gasoline is going for nearly $1.75 -- that's 16 cents higher than just a week ago and 34 cents higher than a year ago. CNN's Bill Tucker talks to experts about what's causing us to pay more at the pump. Learn about the factors that can influence the cost of gasoline at the pumps.
Though the recent spike in gas prices has been attributed to the recent blackout in the Northeast and the broken pipeline in Arizona, there are many other factors that can influence the cost of gasoline, including the price of crude oil, refining of crude oil, distribution and marketing of gasoline, taxes and service station markups. Group students and assign each group one of these variables. Have each group conduct research to learn about its variable and why it impacts the price of gasoline at the pumps. Have groups prepare charts that depict their findings and share their research with the class.
EXTENSION: Challenge students to determine how much they would pay in gasoline per year to drive their favorite cars. Have students locate the fuel economy for city and highway driving of some of their favorite cars. Then direct each student to a fuel cost calculator like the one listed below, and have the student plug in the appropriate numbers (including the local average price of gas per gallon) and retrieve the calculated costs of fuel for one year. Share student findings for the different makes and models they have chosen. Were students surprised at what they would pay for a year's worth of gasoline at the current price? What would they be willing to do to reduce this cost? Discuss.
Economics America National Standards
Standard 7: Markets - Price and Quantity Determination
Students will understand that markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.
Standard 8: Role of Price in Market System
Students will understand that prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives.
The Economics America National Standards (http://www.ncee.net/ea/standards/) are published by the National Council on Economic Education (http://www.ncee.net/).
National Educational Technology Standards for Students
Standard 5: Technology problem-solving and decision-making tools
* Students use technology resources for solving problems and making informed decisions.
* Students employ technology in the development of strategies for solving problems in the real world.
The National Educational Technology Standards (NETS) for Students (http://www.iste.org/nets/students), published by the International Society for Technology in Education (http://www.iste.org).
CNN.com: Gas prices rise at record pace (http://www.cnn.com/2003/US/08/24/gas.prices/)
CNN.com: Phoenix motorists enjoy return of gasoline (http://www.cnn.com/2003/US/Southwest/08/25/phoenix.gas.ap/index.html)
How Gas Prices Work (http://www.howstuffworks.com/gas-price.htm)
Fuel Cost Calculator (http://www.carprice.com/loanfuel.html)
gas prices, refinery, pipeline, blackout