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Suppose that a country called FarAway is a major source of the oil that is used in the USA. The government of FarAway is trying
Suppose that a country called FarAway is a major source of the oil that is used in the USA. The government of FarAway is trying to put the US government under pressure by threatening to cut off their supply of oil to the USA. You work for the government and are asked to estimate what will happen to the price of oil in the USA when FarAway does indeed cut off its supply. How would you go about estimating the effect on the oil price in the USA? What method would you use and what information that is reasonably available would you need? To keep this as simple as possible, assume that it is not possible to increase oil production in the USA or to increase oil imports from other countries to compensate for the loss in supply from FarAway
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