1271Figure: Oil Market Reference: Ref 13-4 (Figure: Oil Market) Consider the world market for oil represented in the figure. Which of the panels correctly depicts what happened in the market for oil during the 1973 OPEC oil crisis?

Question

1271Figure: Oil Market  Reference: Ref 13-4 (Figure: Oil Market) Consider the world market for oil represented in the figure. Which of the panels correctly depicts what happened in the market for oil during the 1973 OPEC oil crisis?

Quizplus · Accepted Answer

During the 1973 OPEC oil crisis, OPEC countries decreased their supply of oil to the global market, leading to a leftward shift in the supply curve. This resulted in a higher equilibrium price and a lower equilibrium quantity of oil traded in the market. Panel B correctly depicts this by showing a leftward shift in the supply curve and an increase in the price of oil with a decrease in the quantity traded. Panels A, C, and D do not accurately depict the effects of the oil crisis.