Oil Producers Expect That Oil Prices Next Year Will Be

question 209

Multiple Choice

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

• A) place more oil on the market this year,thus shifting the present supply curve of oil rightward.
• B) hold some oil off the market this year,thus shifting the present supply curve of oil leftward.
• C) place more oil on the market this year,thus increasing the quantity supplied of oil at lower but not higher prices.
• D) hold some oil off the market this year,thus decreasing the quantity supplied of oil at lower but not higher prices.

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Definitions:

Price Elastic

Describing a situation where the demand for a product is sensitive to price changes, meaning a relatively small change in price leads to a large change in the quantity demanded.

Supply Curve

A graph that details the interaction between the price level of a commodity and the quantity of it provided.

Per-unit Tax

A tax imposed on each unit of a good or service sold, affecting the supply curve by increasing production costs.

Tax Burden

The total amount of tax levied on an individual, corporation, or other entity, often expressed as a proportion of income or economic output.