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
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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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.
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
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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.
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