economics

posted by .

1. DETROIT -- Here's a million-dollar question: How does the global economy connect American car buyers and Russian bureaucrats?
One person who can answer is Reg Modlin, an emissions specialist at DaimlerChrysler AG's U.S. unit. Mr. Modlin, like many other auto-industry executives worldwide, has spent the past several weeks fretting about the soaring price of an obscure, grayish metal called palladium. Many people haven't even heard of it, but for anyone who wants to make a cleaner car or sport-utility vehicle, the precious metal is a must-have. Too bad the main source of the stuff is Russia.
The Price of an Ounce
Last month, concerns that political infighting in Moscow might choke future supplies drove the price of palladium to nearly $1,000 an ounce. Although there is less than an ounce of palladium in most vehicles -- it is used inside the catalytic converter -- that kind of price surge means palladium suddenly is becoming a big-ticket item for auto companies. Car makers brought much of this on themselves. In the mid-1990s, they agreed to accelerate their adoption of tighter national emission standards as part of a deal to head off separate state-by-state rules, which would have played havoc with manufacturing and distribution. Palladium looked like the best solution, since it began cleaning exhaust sooner after starting up than platinum, then the dominant metal in catalytic converters. Plus, the price for little-used palladium hadn't gone above $200 a ounce in more than a decade, while platinum had jumped above $400. Following this decision, palladium prices jumped in the late 90's , but remained below $400 an ounce until this year.…However many automakers are projected to have a big increase in palladium consumption in 2000, as they began to roll out models to meet the tighter national emission rules as regulators turn their focus to explosively popular trucks and SUVs, which have been subject to more-lenient rules. Palladium turns out to be particularly good at cleaning their exhaust. Although there is now a huge effort under way at many companies to find ways to use less palladium, changing car designs in that way will take several years.

a)Based on information in the above article is the demand for palladium elastic or inelastic? Explain your answer. i.e. What about palladium and its use in automobile manufacturing creates its high or its low elasticity of demand ?

  • economics -

    do a little research, then take a shot. Hint: say the price of palladium doubled, how much less passadium be used? I can think of at least two reasons.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. are these correct

    Here is the questions it says to simplify: xyy^2 x^3 and here is the answer x^4 y^3 ---------------------------- here is another one m^3 pmxm^2 x^3 p^5 and here is the answer m^6 p^6 x^4 ---------------------------- and here is another …
  2. math

    express distance as a function of time traveled. jason leaves detroit @ 2pm & drives at constant speed west. he passes ann arbor, 40 mi. from detroit at 2:50 pm. i understand that d=rt. but i'm stuck. is this the answer-- d(t)=t/rt …
  3. Math

    I have 37 different dollar amounts. I also have an additional 2 dollar amounts. If I total the 2 dollar amounts I get the same number as if I total all 37 amounts. Is there a way to use this information to break up the 37 numbers into …
  4. Economics

    Where can I information on how global warming effects the global economy?
  5. statistics

    Burning fuels in power plants or motor vehicles emit carbon dioxide, which contributes to global warming. Table 1.3 displays CO2 emissions per person from countries with populations of at least 20 mil. Why do you think we choose to …
  6. economics

    The US Dollar is en route for depreciation, analyze how the US dollar depreciation may affect the Canadian economy. (this is an essay question for Macroeconomics, any insight or links you could help me with would be appreciated.)
  7. Academic American Government and Economics

    What is the most important issue facing the global economy?
  8. Physics

    (a) CO2 emissions C from a nation’s energy system can be expressed as: C = Population x Energy consumption per person x CO2 emissions per unit of energy consumption. Initially, total emissions are 600 million tonnes of CO2 per year. …
  9. algebra 1

    select an appropriate unit from the choices below and connect the rate to that unit. answer a - ft /s answer b - mph answer c - mm/s answer d - km/s question : A car traveling at 36 ft/s
  10. algebra 1

    select an appropriate unit from the choices below and connect the rate to that unit. answer a - ft /s answer b - mph answer c - mm/s answer d - km/s question : A person walking at 3,4 mph

More Similar Questions