1. The economic disruptions caused by COVID-19 have caused a dramatic fall in oil prices. On April 20th, 2020, the price of oil even became negative (www.forbes.com/sites/salgilbertie/2020/04/23/will-oil-prices-go-negative-again/). Using a supply and demand diagram, explain clearly why this is happening.

5.

Consider the following supply and demand equations:

Supply: p=q

Demand:p= 86029q

Show your work as you respond to the following questions.

(a) What is the market equilibrium?

(b) Depict the market equilibrium in a diagram.

(c) What is the Consumer Surplus at equilibrium?

(d) What is the Producer Surplus at equilibrium?

(e) What is the Total Surplus?

6.

The coronavirus pandemic might change air travel for a long time. In particular, airplane tickets are expected to become more expensive, as airlines are forced to comply with public health measures: fewer seats on flights, longer boarding times, and social-distancing in airports.(https://www.thestar.com/business/2020/05/08/why-flying-is-about-to-get-a-lot-more-expensive-for-good.html). Assuming this is the case, and using a supply and demand diagram, explain why airplane ticket prices will rise.