Exercise set 7.1 Question 22

Please read the following passage and answer the questions below:

The average price of gasoline will be below $3 a gallon in 2015, the Energy Department predicted Wednesday. Drivers are now paying $2.92 per gallon on average across the nation, according to AAA, but late fall is often when the price of gas hits its low for the year. The EIA is now saying that these prices aren't just a low point, but instead will be the norm next year. The national average has fallen for 48 straight days and is at its lowest point since December of 2010. EIA administrator Adam Sieminski attributed the lower pump prices to lower prices for crude oil and weak fuel demand. The global price of crude has fallen by $35 a barrel, or 30 percent, since late June and closed at $80.38 Wednesday. Oil production around the world has been strong in recent years. A boom in the U.S. has pushed domestic production up 70 percent since 2008. At the same time, demand for fuels is growing more slowly than expected in Asia and Europe because of weak economic growth. The U.S. economy is faring relatively well, but more fuel efficient cars and changing driving habits are keeping domestic gasoline demand low. The EIA expects demand to fall slightly next year despite the lower pump prices.

Based on your schematization of the EIA's argument above, match each of the items below with an appropriate description. Note that some descriptions may apply to more than one item. The descriptions are as follows:

Diagnostic implicit question	Predictive implicit question
Central trace data	Unstated connecting condition
Explanatory resource	Prediction conclusion
Diagnostic conclusion	Prediction rival
Diagnostic rival

1. The low recent gasoline prices are caused by low crude oil prices--high supply and low demand.
2. Average gasoline prices will be exactly $3 per gallon in 2015.
3. Fuel demand in the U.S., Europe, and Asia has been low.
4. The low recent gasoline prices are caused by government price controls.