In 2010, a British Petroleum Oil Rig Exploded in the Gulf

question 211

Multiple Choice

In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased. Which of the following best explains the decrease in the price of gasoline?

• A) The quantity demanded of gasoline increased.
• B) The demand for gasoline decreased, and the effect of the decrease in demand on the gasoline price was greater than the price effect of the decrease in supply.
• C) The demand for gasoline increased, and the effect of the increase in demand on the gasoline price was less than the price effect of the decrease in supply.
• D) The demand for gasoline remained unchanged.

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Definitions:

Group Polarization

The phenomenon by which a group's prevailing attitudes or beliefs become more extreme following group discussions, as members tend to support more extreme positions.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Door-In-The-Face

A persuasion technique involving making a large, unreasonable request that is likely to be refused in order to increase the likelihood of agreement to a smaller request later.

Lowballing

A persuasive technique often used in sales where an initially lower price is offered to get agreement from the buyer, only for it to be raised before the sale is concluded, often for reasons made to seem unavoidable.