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Macroeconomics 8th Edition by David Colander
Edition 8ISBN: 978-0077398088Macroeconomics 8th Edition by David Colander
Edition 8ISBN: 978-0077398088 Exercise 5
In 2004, oil facilities in Iraq were attacked and strong economies in the United States and China boosted the demand for oil.
a.Demonstrate graphically how these events led to increases in oil prices in June 2004. What was the effect on the equilibrium quantity of oil bought and sold?
b.As a result of political pressure, OPEC agreed to increase the daily quota by 2million barrels a day. What was the likely effect on equilibrium oil price and quantity? Demonstrate your answer graphically.
a.Demonstrate graphically how these events led to increases in oil prices in June 2004. What was the effect on the equilibrium quantity of oil bought and sold?
b.As a result of political pressure, OPEC agreed to increase the daily quota by 2million barrels a day. What was the likely effect on equilibrium oil price and quantity? Demonstrate your answer graphically.
Explanation
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Verified
(a) The equilibrium price is likely to i...
Macroeconomics 8th Edition by David Colander
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