Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram.  Cars are becoming more fuel efficient, and therefore get more miles to the gallon. The winter is exceptionally cold. A major discovery of new oil is made off the coast of Norway.

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
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Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram. 

  1. Cars are becoming more fuel efficient, and therefore get more miles to the gallon.
  2. The winter is exceptionally cold.
  3. A major discovery of new oil is made off the coast of Norway.
  4. The economies of some major oil-using nations, like Japan, slow down.
  5. A war in the Middle East disrupts oil-pumping schedules.
  6. Landlords install additional insulation in buildings.
  7. The price of solar energy falls dramatically.
  8. Chemical companies invent a new, popular kind of plastic made from oil.
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