Suppose That War in the Middle East Reduces the Supply

question 27

Multiple Choice

Suppose that war in the Middle East reduces the supply of oil forcing the country to economize on oil. How should the central planner optimize the economic problem under this situation?

• A) shift oil out of uses where good substitutes for oil exist
• B) supply oil for uses where few substitutes for oil exist
• C) Both of the answers are correct.
• D) Neither of the answers is correct.

---

Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific moment, showing assets, liabilities, and shareholders' equity.

Adjusted Trial Balance

A statement listing all accounts and their balances after adjustments, used to verify the equality of debits and credits before generating financial statements.

Financial Statement Column(s)

Specific sections within financial statements that organize and present data in a structured manner, facilitating analysis and comparison.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.