Lecture 2: Supply , Demand, Complements, Substitutes. Joshua Tuynman Office Hours: Monday 1:30-3:00 Tuesday 9-10:30 Office Location: VKC B42G (under the stairs at VKC library entrance).
Changes in the price of oil cause the demand curve for oil to shift …
… whereas changes in the fuel efficiency of cars cause a movement along the demand curve for oil.
What affects the demand for oil?
What affects the supply of oil? Let’s think through what happens with changesin price.
Oil is at a much higher price now than it was twenty years ago. In what specific ways has that affected the way oil is produced? What does the change in oil production mean for the future of oil prices?
If the price of oil went up, what would happen?
A. The supply curve would shift right
B. The supply curve would shift left
C. The quantity supplied would increase
D. The quantity supplied would decrease
F. B & D