20190929_212128.jpg - 81 Refer to Reading 1 Why does increased shale oil production in US causes a decline in oil prices a of buyers increase causing

20190929_212128.jpg - 81 Refer to Reading 1 Why does...

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Unformatted text preview: 81 Refer to Reading 1. Why does increased shale oil production in US causes a decline in oil prices? a. # of buyers increase causing prices to decrease b. # of sellers increase causing prices to decrease c. # of buyers decrease causing prices to decrease d. # of sellers decrease causing prices to decrease 82. Refer to Reading 1. What is the impact of decreased import of oil by US on oil price? a. Demand for oil in the world market shifts left causing prices to decrease b. Demand for oil in the world market shifts right causing prices to increase c. Supply of oil in the world market shifts left causing prices to increase d. Supply of oil in the world market shifts right causing prices to decrease 83. Refer to Reading 1. If high cost oil firms shut down their businesses, how will oil price be affected? a. # of buyers increase causing prices to decrease b. # of sellers decrease causing prices to decrease c. # of buyers decrease causing prices to decrease d. # of sellers decrease causing prices to increase 84. Refer to Reading 1. How does new technology (fracking and horizontal drilling) used by US shale oil producers affect the price of oil ? a. Demand for oil in the world market shifts left causing prices to decrease b. Demand for oil in the world market shifts right causing prices to increase c. Supply of oil in the world market shifts left causing prices to increase d. Supply of oil in the world market shifts right causing prices to decrease Scenario 6. Assume there are two buyers (Alp and Eren) in the market for tea. Alp's demand for tea is given by: ed.tea = -4Ptea + IncomeAlp + 6P coffee and Eren's demand for tea is given by: QEren = -6P tea + IncomeEren + 4Pcoffee where Prea 2 0 denotes the price of 1 kg of tea and Pcoffee 2 0 denotes the price of 1 kg of coffee. Assume tea and coffee are substitutes and Alp's income is 970 AZN whereas Eren's income is 1780 AZN. Assume also that price of coffee (P coffee ) equals 5 AZN per kg. 19...
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