Question

1. If the government places extensive new regulations on natural gas and oil production, what will...

1. If the government places extensive new regulations on natural gas and oil production, what will happen to the price of these commodities in the short run? What will happen to consumer demand for these products in the long run?
2. Assume the 76ers will the NBA Championship. What is likely to happen to ticket prices next season? What is likely to happen to players salaries as they are renegotiated?

Homework Answers

Answer #1

  1. WIth the government placing extensive new regulations on natural gas and oil production will lead to a fall in the supply. This in short run will lead to increase in the price of oil and natural gas production. In the long run the consumer will react by moving to cheaper substitutes thus the demand for oil and natural gas will fall. Thus, in the long run the price will return to its original level.

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