Oil and Natural Gas Can Each Be Used as a Source

question 53

Multiple Choice

Oil and Natural Gas can each be used as a source of energy and are,for many purposes interchangeable.Which of the following best explains the increase in the price of natural gas that accompanied the increase in the price of oil during the 1990-1991 Persian Gulf War?

• A) Increased oil prices raised demand for natural gas,a substitute good.
• B) Increased oil prices raised the quantity demanded of natural gas by movement along the natural gas demand curve.
• C) Increased oil prices reduced supply of natural gas,a substitute good.
• D) Increased oil prices reduced supply of natural gas,an alternate good.
• E) Increased oil prices raised supply of natural gas,a substitute good.

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Definitions:

Holding Cost

Expenses associated with maintaining inventory, including storage, insurance, and opportunity costs.

Transportation Cost

Expenses related to the movement of goods or materials from one location to another, including shipping, freight, and logistics costs.

Vidalia Onions

A variety of sweet onion grown exclusively in a specific region of Georgia, known for its mild flavor.

Safety Inventory

Additional stock that is kept to prevent stockouts and ensure smooth production or sales processes in the face of demand variability.