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 # of smartphones would increase for all companies.

b. The number of smartphones made would decrease for SamartWire.

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

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