The OPEC Oil Price Shocks of the 1970s Were Example

question 262

Multiple Choice

The OPEC oil price shocks of the 1970s were example of

• A) negative demand shocks.
• B) negative supply shocks.
• C) positive demand shocks.
• D) positive supply shocks.
• E) what happens from listening to too much ABBA.

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing the benefit to producers.

Binding Price Ceiling

A government-imposed price limit on how high a price can be charged for a product or service, set below the market equilibrium, causing shortages.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, essentially the profit producers earn from selling a good.

Consumer Surplus

The variance in the sum total consumers are enthusiastic and financially able to spend on a good or service versus what they end up paying.