Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 4, Problem 5Q
To determine
Meaning of “cheap oil” decline and its implications for price.
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Students have asked these similar questions
how do oil prices affect the market for this good (fertilizer).
• Sketch a correctly labeled graph of the supply of gasoline today
and show the effect if producers today start expecting that the
price of gasoline tomorrow will increase. Be sure to label your
axes and curves. There is a similar graph in your textbook to look
to for a model.
The price of a gallon of gas moves up and down often. What this means is that, most of the time, the gasoline market is not in equilibrium. When its price goes up, what might be happening to cause this? When the price goes down, what might be happening to cause this?
Chapter 4 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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Similar questions
- llustrate in the below graph the consequences caused by an oversupply (high increase) on supply and a slight decline (small decrease) of demand -What will happen with the price of oil, will increase or decrease? -What about the total quantity of oil production, will increase or decrease? . please make sure the answer is correct 100%arrow_forwardIf everyone thinks that the price of gas will go up next week, what is likely to happen to the demand for gasoline today?arrow_forwardWhat components will cause a Shift in the Supply curve? What happens if a market is out of Equilibrium?arrow_forward
- Suppose an increase in demand in the market for mutual funds (a financial capital market) causes the interest rate to increase from 2% to 4%. How will this increase in demand affect supply and quantity supplied?arrow_forwardIdentify which side of the market for new automobiles is affected (demand or supply), how is it affected (increase or decrease), what happens to equilibrium price and quantity exchanged due to each of the following changes separately. (You don’t need to draw a graph unless it really makes your life easier) d. A new technology is developed that makes car production twice as fast as it used to be. e. A flourishing economy increases consumers’ incomes. f. Producers expect car prices to rise in the near future.arrow_forwardHow might companies such as Mars and Nestlé react to an increase in the price of sugar?arrow_forward
- Before pandemic, face masks are only used in certain hospitals handling highly contagious pulmonary diseases such as San Lazaro Hospitals and the ICUs of every hospital. However, studies and other health organizations and agencies talk about it’s effectivity to prevent people from contacting the virus. Which of the following non-price determinants will affect the supply and in what way? How will it affect the country’s economy?arrow_forwardIn August 2005, Hurricane Katrina damaged or destroyed oil platforms in the Gulf of Mexico, refineries along the Gulf coast, and the pipeline infrastructure that transports oil and gas to customers across the eastern United States. The winter of 2006 was unusually cold in many parts of the country. How did these events affect the market for natural gas? Use graphs to explain your points.arrow_forwardUsing a graph, explain how an increase in technology will effect the equilibrium price and quantity of DVD players. Again using a graph, explain what happens in the market for video cassette recorders. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- WHAT COULD EXPLAIN THE SIMULTANEOUS INCREASES IN THE PRICES OF LITHIUM AND THE PRODUCTION OF LITHIUM? HOW CAN SUPPLY AND DEMAND CURVE OR A SHIFT IN THE SUPPLY CURVE LEAD TO THIS RESULT?arrow_forwardConsider the market for cars. Car producers expect the price of cars to increase next month. What will happen to the supply curve right now? Group of answer choices A The current supply of cars will decrease (a shift in the entire curve) B The current supply of cars will increase (a shift in the entire curve) C The current quantity supplied for cars will increase (a movement along the curve) without a shift in the curve D The current quantity supplied for cars will decrease (a movement along the curve) without a shift in the curvearrow_forwardHow does oil play a role in the price of fertilizer?arrow_forward
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