Macroeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859477
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Chapter 3, Problem 15E
To determine
Reason for the rise in
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Draw a supply and demand curve for oil. The government says we can no longer import oil from overseas, what happens to the supply or demand of oil? Why?
A cyberattack this week closed the largest fuel pipeline in the U.S., restricting gasoline supplies to the northeast. Use a supply and demand diagram to illustrate the effects on gasoline prices in that region. What is likely to happen to the revenue of gas producers? Explain.
Illustrate using a supply and demand graph what happened to gasoline prices in the World View, and then identify the effect on
equilibrium price and quantity.
WORLD VIEW
Gas Prices Jump in Wake of Saudi Attack
Saudi Arabian oil processing plants in Abqaiq were hit by
drone strikes, shutting down about half of the Kingdom's
production capacity. Early estimates put the damage at about
5.7 million barrels of oil per day, roughly half of Saudi output.
Crude oil prices jumped as much as $8 per barrel and U.S.
gasoline prices jumped by 9 cents a gallon, according to the
U.S. Energy Information Agency.
Source: News reports, September-December 2019.
Chapter 3 Solutions
Macroeconomics (MindTap Course List)
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