Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 45 pts 4- WORLD VIEW Rebounding Oil Price Spurs More Rigs The recent spike in the price of oil has brought more rigs on

image text in transcribed
Question 45 pts 4- WORLD VIEW Rebounding Oil Price Spurs More Rigs The recent spike in the price of oil has brought more rigs on line. According to the weekly Baker Hughes count, the number of active oil rigs has jumped 60 percent since last year. When oil prices were falling, the number of active U.S. rigs fell from 2,000 in 2015 to only 480 in 2016. The latest survey, for the week of March 10, 2017, put the number at 762. Higher-cost shale producers in the Permian basin are quick to respond to higher oil prices, acting as the marginal producer. Overall, economists estimate the elasticity of oil supply at around 0.1. Source: Media reports of March 2017. Based on the estimated price elasticity of supply, calculate the change in the quantity of oil supplied if the price of oil increased by 20 percent. Please round your response to one decimal place. The quantity of oil would have [ Select ] ["increased", "decreased"] by [ Select ] ["2.0", "20", 60"] %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Economics questions

Question

The sequence a 1 5, a n 3a n-1 is an example of a _____ sequence.

Answered: 1 week ago

Question

Mortality rate

Answered: 1 week ago

Question

Armed conflicts.

Answered: 1 week ago