Question

There are two different schools of thought on how to lower gasoline prices and reduce US...

There are two different schools of thought on how to lower gasoline prices and reduce US dependence on foreign oil. Can you graph how these two changes will bring about lower gas prices?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The first way to achieve the desired goal is to increase the supply of local oil. An increased supply of the oil will reduce the prices of the Oil in the US market by Shifting the supply curve to the right as shown in the graph below. The initial equilibrium price of the oil in the US was at Pand Quantity Q. After the increase in the production of the oil, the new price is P' and quantity Q'.

The second way to decrease the price and dependence on the foreign oil is to reduce the demand for oil in the market. The US can achive this by promoting substitutes like an Electronic vehicle, increased use of shale gas etc.

It will reduce the demand for oil and reduce its price as shown in the graph below.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Gasoline "prices at the pump" go up and down and Oil "costs per barrel" go up...
Gasoline "prices at the pump" go up and down and Oil "costs per barrel" go up or down, but they do so at different rates and even in opposite directions sometimes. We want to think that demand and supply controls prices where the cost of crude oil is set by the same economic conditions that determine the price of gas. What are these mismatched trends (graphs of each are shown in the following web links) telling us about how demand...
Suppose a study found that gasoline prices are lower in markets in which certain gas stations...
Suppose a study found that gasoline prices are lower in markets in which certain gas stations are present (call them CheapGas stations). What possibilities can you think of that would explain this correlation?
You are comparing the average price of gasoline in 10 different US cities. You sample gas...
You are comparing the average price of gasoline in 10 different US cities. You sample gas prices in each city. To see if there is at least one city that has different average prices, you would use Group of answer choices one sample t test independent sample t test dependent (matched) sample t test simple independent sample ANOVA dependent (matched) sample ANOVA factorial ANOVA 2. You want to see if there is any difference in how many students would vote...
You can get your electricity from two different sources: Solar (S) or Natural Gas (G). You...
You can get your electricity from two different sources: Solar (S) or Natural Gas (G). You see solar and natural gas as perfect substitutes, and are indifferent between the two sources. Right now, electricity from natural gas is $0.10 per unit and solar is $0.25 per hour. You have $50 per month to spend on electricity. 1 Intuitively, given your preferences and prices, which source would you use? 2 Based on your preferences, what is your utility function? 3 Graph...
3. Answer the following by looking at the article: Macroeconomics: Schools Of Thought By Stephen D....
3. Answer the following by looking at the article: Macroeconomics: Schools Of Thought By Stephen D. Simpson, CFA The field of macroeconomics is organized into many different schools of thought, with differing views on how the markets and their participants operate. Classical Classical economists hold that prices, wages and rates are flexible and markets always clear. As there is no unemployment, growth depends upon the supply of production factors. (Other economists built on Smith's work to solidify classical economic theory....
Public policymakers often want to reduce the amount that people smoke. There are two ways that...
Public policymakers often want to reduce the amount that people smoke. There are two ways that policy can attempt to achieve this goal. One way to reduce smoking is to shift the demand curve for cigarettes and other tobacco products. Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at reducing the quantity of cigarettes demanded at any given price. If successful, these policies shift the demand curve...
Question 5 Which of the following plants were incorrectly thought by some to be able to...
Question 5 Which of the following plants were incorrectly thought by some to be able to liberate poor countries from dependence on imported oil? A) Kelp B) Oil palm and Jatorpha C) Kundzu Vines D) Poppy seeds E) None of the choices Question 6 What factors makes the cultivation of sugarcane and the subsequent ethanol fermentation a clearly energy - rewarding enterprise? A) All the choices are correct B) Sugarcane photosynthesizes year around C) Ethanol production does not require any...
1. What is an industry that has only one significant supplier? What is the nature of...
1. What is an industry that has only one significant supplier? What is the nature of the product? How easy would it be to start a similar firm or stop offering the product/service? How easy is it to attain information about the industry or product or service? 2. Are there any products that are sold in a market in which the seller is able to charge different prices to different consumers? How are the sellers able to do this? 3....
1)    Electricity use per capita is lower in California than in most of the U.S.,...
1)    Electricity use per capita is lower in California than in most of the U.S., and has been growing slower in California over the past thirty years than in most of the country. You have been hired to advise a different state or country on how to improve energy efficiency. Drawing on the experience in California, what do you recommend? (Be sure to state WHICH state or country you are advising!). 2) Provide intuition. Under the Hotelling model of...
One of the most important changes in U.S. cities over the past two decades is a...
One of the most important changes in U.S. cities over the past two decades is a dramatic reduction in violent crime. In this problem, we consider the impact of falling urban crime rates in a Rosen-Roback framework. 1. Suppose that crime is a consumer disamenity. Show the impact of a reduction in crime in a standard Rosen-Roback graph. How are equilibrium wages and rents affected in the city? [7 points] 2. Now suppose that falling crime also allows firms to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT