1. (5 pt.) Explain why the market for WTI crude oil can be viewed as a "perfectly competitive market." How is the price of crude oil determined? Are there a large number of buyers and sellers? Do individual firms buying or selling crude oil have the power to set price? Is this a standardized Is this product? Is there "free entry or exit" in this market? Are there any 1000-pound gorillas in this market that have the ability influence the price of crude oil?
2. (2,5 pt.)Has there been an increase or decrease in demand? Remember that some of the factors that could shift the demand curve include changes in preferences, income, the price of substitutes or complements, or a change in the number of consumers in the market. Explain your reasoning carefully.
3. (2.5 pt.)Has there been an increase or decrease in supply? Remember that some of the factors that could shift the supply curve include changes in the costs of materials, wages, or other inputs, changes in technology or the number of firms in the market. Explain your reasoning carefully.
4. (10 pt.)Draw a supply and demand graph to illustrate the changes described above. Be sure to label your graph and clearly indicate which curve(s) shifts and what happens in your diagram to the equilibrium price and quantity. What is the current price of crude oil? Explain the main factors contributing to the recent increase in oil prices. Thenforecast the price of crude oil at the end of this year. To do this you need to explain which of the demand and supply shifters are likely to change over the next few months. Show your forecast in your supply-demand graph of the WTI oil market. What types of financial investment could you make to profit from your economic analysis?
5. (20 pt.)In the context of your S-D crude oil model analyze (explain in words) the impact of the following changes in economic conditions (ceteribus paribus) on the equilibrium price and quantity of oil. Show your result in a supply-demand graph (separate graph for each change) of the U. S. oil market.A.economic growth continues which increases household disposable income.the price of natural gas (methane) and electricity decrease. non-OPEC oil production increases due to improved drilling technology. tariffs on steel increase the costs of drilling and producing crude oil. Saudi Arabia and Russia agree to reduced oil production.
6. (10 pt.) Draw a hypothetical supply-demand graph for the apartment rental market in San Francisco. In your graph what is the equilibrium price and quantity of apartments? Show the impact of a binding price ceiling that San Francisco puts on rental properties. At the price ceiling what is the quantity demanded? What is the quantity supplied? Explain why rent controls typically result in economic inefficiency?
7. (17 pt.)Why Do Prices Keep Going Up and What's the Cause of Inflation...

What is meant by the term inflation? How is inflation measured in the U. S. economy? What is the Federal Reserve Bank's (FED) target for inflation? What was the percentage increase in consumer price index (CPI) between February 2023 and February 2024? This past week CPI data and PPI data for Feb. 2024 showed an upward spike in prices. On an annualized basis how high was inflation in February as measured by the CPI and PPI? Give at least four reasons why prices keep going up. Explain your reasoning. What do you expect the inflation rate to be at the end of 2024? Explain. In view of this recent inflation data when do you expect the Federal Reserve Bank to begin lowering interest rates? Explain.

8. (17 pt.) Hiring Boom Continues ...Howmany jobs were added in the U.S. economy between February 2023 and February 2024? How many jobs were added in February 2024? Why has it been difficult for firms to fill job openings? How many job openings are there for each unemployed worker? How fast have nominal wages increased over the past year? After adjusting for inflation calculate the change in real wages over the past year. What is the BLS formula for calculating the unemployment rate? Why did the unemployment rate increase in February despite robust job growth? Explain.

9.Aaron(16 pt.) Define what is meant by the terms Real GDP and Nominal (current dollar) GDP? What was the rate of growth in real GDP in 2023? What was the rate of growth in real GDP (annualized) in the 4^th quarter of 2023? Why is nominal GDP increasing much faster than real GDP? Is the US economy currently in a recession? Will the U.S. economy enter a recession in 2024? Explain. Is consumer spending increasing or decreasing? Explain. Does it make sense that firms like General Mills and Campbells Soup are currently reporting increases in sales and profits but a decrease in the quantity of good sold? Explain.