Imagine that you work for a domestic oil refinery, and answer either question G111 or G112. You do not work for anoil producer, but rather for arefinery, which turns crude oil into many different petroleum products, from jet fuel to gasoline, which are then sold to world markets. You have the option of purchasing crude oil from U.S. sources or from various foreign countries. You must purchase crude oil in order to make products that you can sell in the United States or in other countries.

G11-1

Exchange Rate Effects on Industry Using shifts in supply and demand curves, describe how a change in the exchange rate affected your industry. Label the axes, and state the geographic, product, and time dimensions of the demand and supply curves you are drawing. Explain what happenedtoindustrypriceandquantitybymakingspecificreferencestothedemandandsupplycurves. How can you profit from future shifts in the exchange rate? How do you predict future changes in the exchange rate?

G11-2

Exchange Rate Effects on Your Firm describe how a change in the exchange rate affected your firm. Explain what happened to your price and quantity. How can you profit from future shifts in the exchange rate? How do you predict future changes in the exchange rate?