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- Explanation of possible effects of higher oil prices on different types of firms and consumers.How do you expect future oil prices to behave? Please justify your response.Define the current status of supply and demand for gas. Identify at least one factor that has caused the supply curve to shift for that product or service. Identify at least one factor that has caused the demand curve to shift for that product or service
- The world's total petroleum reserve is estimated at 1.5 x 1022 J. At the present rate of consumption, 6.027 x 1017 J/day, how long would it take to exhaust the supply (in years)?Coffee is now the second most traded commodity in the world after crude oil. Not only has demand for various coffee products risen sharply in Western countries in recent years, increasingly there is also greater taste for coffee drinks in developing countries such as China and India. In addition, by-products of coffee beans have become popular such as coffee leaves which can be used to brew a tea with known health benefits. However, as a natural produce, coffee plants are subject to weather conditions. Recently major producers such as Brazil have been plagued by droughts. Using the demand-supply model, explain the likely effects of these phenomena in the coffee bean market. How can a market analyst use this information to her advantage?Along with many other producers, you own a small oil well. The market is very competitive. Themarginal extraction cost is $10 per barrel. The interest rate is 5%. The annual demand for oil isQ = 90,000 – 2,000P where Q is in barrels per year and P is in dollars per barrel.Use your knowledge about Hotelling’s Rule to answer the following questions: Oil is trading for $25/bbl on Jan 1st, 1999. What do you expect the path of oil pricesand extraction quantities to be from 1999-2010 (assuming no shocks to the market)?A day later, on Jan 2nd, 1999, the Wall Street Journal opens with a story that there is now amore reliable reserves estimate. Total reserves are estimated at 760,000 barrels. b. What is the oil price directly after this news becomes public? When will the worldrun out of oil, assuming no more oil is discovered? [Hint: use a spreadsheet.]You have a couple million dollars to spend on Dec 31st, 1999. You decide to quickly buy out allsmall oil producers. By Jan 1st, 2000, you are…
- Along with many other producers, you own a small oil well. The market is very competitive. Themarginal extraction cost is $10 per barrel. The interest rate is 5%. The annual demand for oil isQ = 90,000 – 2,000P where Q is in barrels per year and P is in dollars per barrel.Use your knowledge about Hotelling’s Rule to answer the following questions: Oil is trading for $25/bbl on Jan 1st, 1999. What do you expect the path of oil pricesand extraction quantities to be from 1999-2010 (assuming no shocks to the market)?A day later, on Jan 2nd, 1999, the Wall Street Journal opens with a story that there is now amore reliable reserves estimate. Total reserves are estimated at 760,000 barrels.Supply and demand curves for a consumer item are given by q = S(p) = 500 + p and q = D(p) = %3D 2300 - 2p respectively. p is the price, in dollars for one unit of this item and q is the number of units. The equilibrium price is p* = $600 as you can check for yourself. A sales tax of 3.8%, to be directed at the consumers, is under consideration. Ultimately, the suppliers will bare some of the burden for this tax since it will cause the equilibrium price to drop. Determine the amount of money per item that supplies stand to lose due to this tax which is directed at the consumers. Give your answer as a dollar amount that has been rounded to the nearest cent as in 23.98 or 8.32 for example.Diagrammatically show and explain what happened to the oil market if the price remained unchanged despite the concerns over the fuel (b) demand. [Tunjukkan secara gambar rajah dan terangkan apa terjadi kepada pasaran minyak sekiranya harga tidak berubah meskipun permintaan bahan bakar.] wujud kebimbangan terhadap
- 70 – p and the marginal cost of retail water is 2. Suppose retail water demand is given by wa mc = 0.00125w?. Currently the supplier cannot fulfill the quantity demanded under marginal-cost pricing, because natural water is in short supply. Suppose that only 32 units of natural water are available. Due to system leakage and evaporation, the relationship between natural water pumped and retail water received is Wntri – 10 Wrtl 1.1 What is the value of an action to increase natural water availability to 43 units?"Trinidad and Tobago is not only impacted by the economic consequences of COVID-19; but as an oil-and-gas exporting country, the economic, financial and social consequences have been further compounded by the dramatic drop in oil and gas prices. The worldwide demand for crude oil has crashed in the context of stay-home-lockdown orders. As I indicated earlier, on April 20, 2020, the price of West Texas Intermediate (WTI) took an unprecedented turn entering negative territory for the first time in its history, The WTI June 2020 delivery for crude oil is currently US$15 per barrel and the natural gas June futures price is US$1.82 per MMBTU." "The Central Bank of Trinidad and Tobago is helping the economy navigate through these difficult circumstances. For example, the Central Bank has reduced the reserve requirements for the commercial banks from 17.0 percent to 14.0 percent; and the repo rate from 5.0 percent to 3.5 percent. As a result, Commercial banks have reduced their prime lending…"Trinidad and Tobago is not only impacted by the economic consequences of COVID-19; but as an oil-and-gas exporting country, the economic, financial and social consequences have been further compounded by the dramatic drop in oil and gas prices. The worldwide demand for crude oil has crashed in the context of stay-home-lockdown orders. As I indicated earlier, on April 20, 2020, the price of West Texas Intermediate (WTI) took an unprecedented turn entering negative territory for the first time in its history, The WTI June 2020 delivery for crude oil is currently US$15 per barrel and the natural gas June futures price is US$1.82 per MMBTU." "The Central Bank of Trinidad and Tobago is helping the economy navigate through these difficult circumstances. For example, the Central Bank has reduced the reserve requirements for the commercial banks from 17.0 percent to 14.0 percent; and the repo rate from 5.0 percent to 3.5 percent. As a result, Commercial banks have reduced their prime lending…
