5. Let's use our model ofsupply and demand to model the market for oil. You should draw separate diagrams for each question that asks you to draw a diagram. a. Suppose there is a decline in the supply of oil. Draw a supply and demand diagram and use it to illustrate the impact on the market. b. Suppose there is some geopolitical crisis that leads consumers to believe that the supply of oil will be reduced several months from now tie. in the future}. Use the model of supply and demand to illustrate the impact on the market today. Explain your answer to part b. d. Suppose the government is concerned about the effect ofhigh fuel prices on consumers. As a result, the government offers consumers a subsidy for purchases of 5' home heating oil. Model the impact of this subsidy using a supply and demand diagram. (HINT: You can model a subsidy by shifting the demand curve up by the amount ofthe subsidy. Altematively, you could shift the supply curve down.) e. From the point of view of the government and the oil consumers, both ofwhom are concerned with the high cost ofoil. the subsidy described in the previous question had some desirable effects as well as some undesirable effects. i. What was the benet of the subsidy? ii. In terms of the costs of the subsidy. one issue is that it costs the government money to subsidize these purchases. But there are other issues as well. What is another undesirable outcome ofthis subsidy? f. To help ease the burden of high energy prices this past winter1 the German government subsidized gas and electricity purchases for households and businesses. [See this article for more information.) But each customer faced a limit on the quantity of gas and electricity that they were allowed to purchase at the subsidized price; the limit was based on the quantity that the customer had purchased the prior year. That is, consumers could buy gas and electricity at lower subsidized prices, up to a limit of 80% of the amount they purchased the previous year; any energy purchases beyond that would have to be purchased at the [higher] market rate. Explain the rationale her this design: Why did they only subsidize a portion of each customer's energy purchases, and why base it on their prioryear consumption