Question 1 2 pts Consider the information in the le named Green Paradox. Concentrate on the scenario called Green Paradox Case 1. Currently (prior to any GHG policies by the Group 1 countries) the world equilibrium price of oil is 100-00 dollars and the equilibrium quantity of oil transacted in the world market is units. At this price, Group 1 countries are consuming units of oil and Group 2 countries are consuming units of oil. Group 1 countries reduce their demand for oil by 70 units through aggressive conservation policies as well investments in renewable sources of energy. They hope the global consumption and production of oil will decreases by the same amount. However, as a result of this policy, the world equilibrium price of oil changes to dollars and the equilibrium quantity of oil transacted in the market changes to units. At this new price, Group 1 countries will be consuming units of oil and Group 2 countries will be consuming units of oil. 50, Group 1 countries were hoping to reduce global consumption of oil by 70 units. However, the global consumption was reduced by units. Question 2 1 pts Consider the information in the le named Green Paradox. Concentrate on the scenario called Green Paradox Case 2. This case is not quite realistic because it assumes that oil producers do not respond at all to changes in oil prices. Group 1 countries reduce their demand for oil by 60 units through aggressive conservation policies as well investments in renewable sources of energy. They hope the global consumption and production of oil will decreases by the same amount. However, as a result of this policy, the world equilibrium price of oil changes to dollars and the equilibrium quantity of oil transacted in the market changes to units. At this new price, Group 1 countries will be consuming units of oil and Group 2 countries will be consuming units of oil. 50, Group 1 countries were hoping to reduce global consumption of oil by 60 units. However, the global consumption was reduced by units. Question 3 1 pts Consider the information in the le named Green Paradox. Concentrate on the scenario called Green Paradox Case 3. This is also not a very realistic case because it assumes that the price of oil will remain the same regardless of demand conditions . But it adds some insight to the issue. Group 1 countries reduce their demand for oil by 60 units through aggressive conservation policies as well investments in renewable sources of energy. They hope the global consumption and production of oil will decreases by the same amount. After this policy, the world equilibrium price of oil equals dollars and the equilibrium quantity of oil transacted in the market changes to units. At this price, Group 1 countries will be consuming units of oil and Group 2 countries will be consuming units of oil. 50, Group 1 countries were hoping to reduce global consumption of oil by 60 units. The global consumption was reduced by units. However, pay attention to what happened to the consumption of oil in these two groups of countries after the policy. Green Paradox Case 1 In this case Group 1 countries reduce their demand for oil by 70 units. Group 1 Demand Function for Oil 120 110 100 90 80 70 60 50 40 30 20 10 4O 50 60 70 80 90 100 110 120 130 140 150 160 Vertical axes show the price of oil. Horizontal axes show the quantities of oil. 170 180 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Group 2 Demand Function for Oil 20 30 4O 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 120 110 100 90 80 70 60 SO 40 30 20 10 10 20 30 4O 50 60 7O 80 SD 100 110 120 Global Supply of Oil In this case Group 1 countries reduce their demand for oil by 60 units. Group 1 Demand Function for Oil 120 110 100 90 80 70 60 50 4O 30 20 10 0 0000000000 .4vaanth 100 110 120 130 140 150 160 170 Vertical axes show the price of oil. Horizontal axes show the quantities of oil. 180 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Green Paradox Case 2 Group 2 Demand Function for Oil 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 120 110 100 90 80 70 60 50 40 30 20 10 10 20 30 4O 50 60 70 80 90 100 110 120 Global Supply of Oil Green Paradox Case 3 In this case Group 1 countries reduce their demand for oil by 60 units. Group 1 Demand Function for Oil Group 2 Demand Function for Oil Global Supply of Oil 120 $120 $120 110 $110 $110 100 $100 $100 90 $90 $90 80 $80 $80 70 $70 $70 60 $60 $60 50 $50 $50 40 $40 $40 30 $30 $30 20 $20 $20 10 $10 $10 0 $0 $0 130 140 110 190 160 180 120 130 170 130 140 160 180 200 120 150 210 140 150 170 160 110 17 Vertical axes show the price of oil. Horizontal axes show the quantities of oil