SSC
GENERAL ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in purchases of cars
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an increase in the price of oil
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a rise in consumer incomes
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the discovery of new oilfields
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Detailed explanation-1: -Cold weather increases the need for heating oil. This causes a rightward shift in the demand for heating oil and thus oil. Since the demand curve is shifting up the supply curve, the equilibrium price and quantity both rise. A discovery of new oil will make oil more abundant.
Detailed explanation-2: -Prices of Factors of Production An increase in factor prices should decrease the quantity suppliers will offer at any price, shifting the supply curve to the left. A reduction in factor prices increases the quantity suppliers will offer at any price, shifting the supply curve to the right.
Detailed explanation-3: -A decrease in demand for energy will be reflected as a decrease in the demand for oil, or a leftward shift in demand for oil. Since the demand curve is shifting down the supply curve, both the equilibrium price and quantity of oil will fall. Disruption of oil pumping will reduce the supply of oil.