QUESTION 3 Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. (On a piece of scratch paper you should use the 4 step method, draw a diagram, and determine directions of price and quantity) B. Cars are becoming more fuel efficient, and therefore get more miles to the gallon. A. price decrease, quantity increase B. price decrease, quantity decrease C. ✓ A. The winter is exceptionally cold, people need more oil to stay warm A major discovery of new oil is made off the coast of Norway. ✓ The economies of some major oil-using nations, like Japan, slow down ✓ A war in the Middle East disrupts oil-pumping schedules ✓ Landlords install additional insulation in buildings C. price increase, quantity increase D. price increase, quantity decrease

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Q3. Select from the multiple section for each statement. Complete 4-7. (Do not do the 4 step method, just an answer) A. B. C. D.
QUESTION 3
Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and
quantity in the market for oil.
(On a piece of scratch paper you should use the 4 step method, draw a diagram, and determine directions of price and quantity)
B.
C.
A.
Cars are becoming more fuel efficient, and therefore get
more miles to the gallon.
The winter is exceptionally cold, people need more oil to
stay warm
A major discovery of new oil is made off the coast of
Norway.
✓ The economies of some major oil-using nations, like
Japan, slow down
A war in the Middle East disrupts oil-pumping schedules
✓ Landlords install additional insulati in buildings
✓ The price of solar energy falls dramatically.
QUESTION 4
A. price decrease, quantity increase
B. price decrease, quantity decrease
Supply will change in response to a change in demand
Demand will fall
No change in demand
C. price increase, quantity increase
D. price increase, quantity decrease
What is the effect of a binding price ceiling on the quantity demanded of a product?
Demand will rise
Save
Transcribed Image Text:QUESTION 3 Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. (On a piece of scratch paper you should use the 4 step method, draw a diagram, and determine directions of price and quantity) B. C. A. Cars are becoming more fuel efficient, and therefore get more miles to the gallon. The winter is exceptionally cold, people need more oil to stay warm A major discovery of new oil is made off the coast of Norway. ✓ The economies of some major oil-using nations, like Japan, slow down A war in the Middle East disrupts oil-pumping schedules ✓ Landlords install additional insulati in buildings ✓ The price of solar energy falls dramatically. QUESTION 4 A. price decrease, quantity increase B. price decrease, quantity decrease Supply will change in response to a change in demand Demand will fall No change in demand C. price increase, quantity increase D. price increase, quantity decrease What is the effect of a binding price ceiling on the quantity demanded of a product? Demand will rise Save
Expert Solution
Introduction

Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market equilibrium point the maximum price which the consumers are willing to pay is exactly equals the minimum price at which the sellers are willing to sell.

 

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Equilibrium Point
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education