OPEC and allies agree to cut oil production Question Viewer stuck at a low of $60-a-barrel, major oil producers agree to cut crude production. Source: CNBC, December 7, 2018 What is the effect of a cut in oil production on the oil market? O A. decreases the supply of oil and increases the demand for oil; raises OB. decreases the supply of oil and decreases the demand for oil; has an unknown effect on OC. increases the demand for oil; raises D. decreases the supply of oil; raises Consider the market for oil. Draw demand and supply curves consistent with the oil price equalling $60 a barrel. Label the curves Do and So. Draw a point at the market equilibrium price. Label it 1. Now suppose that major oil producers agree to cut oil production. Draw a curve to show the effect of this agreement in the market for oil. Label it. Draw a point at the new market equilibrium. Label it 2. 90- 85- 80- 75- 70- 65- 60- 55- 50- 45- Price (dollars per barrel) Q 40+ 100 110 120 130 140 150 160 Quantity (millions of barrels per day) >>> Draw only the objects specified in the question. 170

OPEC and allies agree to cut oil production Question Viewer stuck at a low of $60-a-barrel, major oil producers agree to cut crude production. Source: CNBC, December 7, 2018 What is the effect of a cut in oil production on the oil market? O A. decreases the supply of oil and increases the demand for oil; raises OB. decreases the supply of oil and decreases the demand for oil; has an unknown effect on OC. increases the demand for oil; raises D. decreases the supply of oil; raises Consider the market for oil. Draw demand and supply curves consistent with the oil price equalling $60 a barrel. Label the curves Do and So. Draw a point at the market equilibrium price. Label it 1. Now suppose that major oil producers agree to cut oil production. Draw a curve to show the effect of this agreement in the market for oil. Label it. Draw a point at the new market equilibrium. Label it 2. 90- 85- 80- 75- 70- 65- 60- 55- 50- 45- Price (dollars per barrel) Q 40+ 100 110 120 130 140 150 160 Quantity (millions of barrels per day) >>> Draw only the objects specified in the question. 170

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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