The Katrina disaster in New Orleans decreased the ability of oil companies to purify crude oil into gasoline. This caused the:
A) supply curve for gasoline to shift inward.
B) supply curve for gasoline to shift outward.
C) quantity of gasoline demanded to move out along the demand curve.
D) quantity of gasoline supplied to move in along the supply curve.

Question

Quizplus · Accepted Answer

The Katrina disaster reduced the capacity of oil refineries, leading to a decrease in the supply of gasoline, which is represented by an inward shift of the supply curve.

The Katrina Disaster in New Orleans Decreased the Ability of Oil