1. After hurricanes hit the Gulf of Mexico, hundreds of oil well platforms and drilling rigs were damaged. Oil production also stopped as people were evacuated. Imagine a hurricane hits the gulf again, damaging 500 out of 2,500 platforms and forcing workers leave another 300 drilling sites to stay safe from the storm. About 90% of oil production is lost due to evacuated workers. About 70% of the oil produced each day is lost due to the damage.

2. A company, SmartWire, develops a robot that can manufacture smartphones. Companies with traditional manufacturing processes can product 500,000 units, or smartphones, per month. Using robots, SmartWire can double the production per month. SmartWire is investing heavily in creating more robots.

3. A medical journal reports that a popular soft drink is linked to serious illness. Experts studied the drink.Fizzy Pop, and were surprised at the high amounts of caffeine and other supplements used to increase energy. When consumed at normal levels of one or two drinks per week, the beverage had minor effects. However, children consuming two to three drinks per day are at risk for caffeine poisoning. Studies show that children under 18 are 50% more at risk of caffeine poisoning.

How would supply be affected in scenario 2?

a. The number of smartphones would increase for all companies

b. the number of smartphones made would decrease for SmartWire

c. The number of smartphone made would not change for any of the companies

d. The number of smartphones made would increase for SmartWire.

In Scenario 1, why is it important to understand the percent of oil lost when making a prediction?

a. the percent lost does not matter

b. it may mean that demand will decrease

c. the increase depends on how much is lost

d. consumers will use the numbers to determine the oil's importance.

Consider Scenario 2, What do you predict will most likely happen as a result?

a. The price for smartphones will decrease as fewer phones are made each month and demand for phones decreases.

b. Workers may be laid off at SmartWire as more robots are used. More workers may be hired at other companies to keep up the supply.

c. The supply of smartphones will greatly increase as SmartWire makes more phones. The increased supply will Las oincrease the price of the phones.

d. The other companies will lay off workers, because they can't keep up with SmartWire's production levels.