In 2011 oil production in Libya was interrupted by political unrest. At the same time, the demand for oil by China continued to rise.

a. Demonstrate the impact on the quantity of oil bought and sold.

Instructions: Draw a parallel shift in the demand or supply curve(s) by grabbing, dragging, and then dropping the curve(s) to the new position(s).

 In the market for oil, compared to the initial equilibrium (E₀), the impact of these events on price is (Click to select) (to increase the price, to decrease price or uncertain) and the impact on quantity is (Click to select) (to decrease the quantity, to increase quantity, or uncertain)


b. Oil production in Libya returned to its original levels by the end of 2012. What was the likely effect on equilibrium oil price and quantity?

Compared to the equilibrium identified in part a, the price will (Click to select) ( remain unchanged, decrease, increase) and quantity will (Click to select) (increase, decrease, or remain unchanged )

Transcribed Image Text:

Instructions: Draw a parallel shift in the demand or supply curve(s) by grabbing, dragging, and then dropping the curve(s) to the new position(s). Price Oil Eo Quantity So Do Instructions: Draw a parallel shift in the demand or supply curve(s) by grabbing, dragging, and then dropping the curve(s) to the new position(s). Price Oil Eo Quantity So Do

Answer rating: 100% (QA)

P Po Because of the political unrest in Libya the price of oil increases The ... View the full answer