Question 1 (1 point)

If oil executives read in the newspaper that massive new oil supplies have been discovered under the Pacific Ocean but will likely only be useful in 10 years, what is likely to happen to the oil supply today?

Question 1 options:

a)	The supply of oil will rise today.

b)	The supply of oil will fall today.

c)	There will be no change in the supply of oil.

Question 2 (1 point)

What's the best way to think about the rise in oil prices in the 1970s, when wars and oil embargoes wracked the Middle East?

Question 2 options:

a)	A rise in demand

b)	A fall in demand

c)	A rise in supply

d)	A fall in supply

Question 3 (1 point)

If the price of oil falls, what will happen to the quantity of oil supplied along a supply curve?

Question 3 options:

a)	It will decrease

b)	It will increase

c)	It will not change

Question 4 (1 point)

If the price of cars falls, what are carmakers likely to do?

Question 4 options:

a)	Make more cars

b)	Make less cars

c)	Make the same amount of cars

Question 5 (1 point)

Question 5 options:

Use the following information to answer questions 5 and 6.

Consider the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge-in this case, the speed with which manufacturing robots can fasten bolts or robot speed-and the wage rate that auto manufacturers must pay their employees. Initially, the robots can fasten 2,500 bolts per hour, autoworkers earn $25 per hour, the price of a sedan is $30,000, and the quantity supplied (Sedans per month) is 250.

Suppose that the price of a sedan decreases from $30,000 to $25,000. This would cause the

of sedans to decrease, which is reflected on the graph by a

supply curve.