ECONOMICS
SUPPLY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
decrease in the price of oil
|
|
|
increase in consumer taste for oil
|
|
|
increase in market size(# of consumers)
|
|
|
an increase in the price of oil
|
Detailed explanation-1: -A discovery of new oil will make oil more abundant. This can be shown as a rightward shift in the supply curve, which will cause a decrease in the equilibrium price along with an increase in the equilibrium quantity.
Detailed explanation-2: -Crude oil prices are determined by global supply and demand. Economic growth is one of the biggest factors affecting petroleum product-and therefore crude oil-demand. Growing economies increase demand for energy in general and especially for transporting goods and materials from producers to consumers.
Detailed explanation-3: -An increase in oil prices usually lowers the expected rate of economic growth and increases inflation expectations over shorter horizons. Decreasing economic growth prospects, in turn, lower companies’ earnings expectations, resulting in a dampening effect on stock prices.
Detailed explanation-4: -Crude oil prices react to many variables, including supply and demand prospects and the perceived risk of market disruptions. Economic growth can drive up the demand for crude oil, while slowdowns tend to lower demand and prices.