Suppose That Large Oil Reserves Are Discovered Off the Coast

question 20

Multiple Choice

Suppose that large oil reserves are discovered off the coast of Cuba, and these reserves will increase the world's supply of oil by 2.5 percent. If the elasticity of demand and supply of oil are 0.50 and 0.40, respectively, what happens to the price of oil?

• A) It falls by 2.5 percent.
• B) It falls by 25 percent.
• C) It falls by 2.78 percent.
• D) It falls by 36 percent.

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Definitions:

Codes Of Ethics

Written guidelines issued by an organization to its workers and management to help them conduct their actions in accordance with its primary values and ethical standards.

Cultural Values

The core principles and ideals upon which an entire community exists; these values profoundly influence people's behavior and perceptions.

Sharing Economy

An economic model defined by the sharing of resources and services, often facilitated by community-based online platforms, to reduce waste and increase efficiency.

Blurring Of Boundary

The phenomenon where the lines or distinctions between different categories, such as work and home life or genres and media, become less clear.