Economics Question Please Help! :((((((?

The assignment is to write an essay about the following: Osama Bin Laden emerges from hiding, returns to Saudia Arabia and overthrows the ruling Royal Family. An anti-American Muslim state is established and oil prices increase two hundred dollars per barrel overnight. In the context of supply and demand (do not consider any military implications) explain the likely result of this crisis. What would this do to the price of other goods and services? Explain. How would this occurrence affect the determinants of supply and demand for other goods and services, such as automobile purchases, and hotel rates?Remember, there is still the same amount of oil in the ground, just the price has changed. With this price increase what is likely to change first, demand or supply? What would other oil producing countries probably do? Your response can be free ranging but stick to the issue of economics. Okay, so I just want maybe some thoughts from others about what would happen? I'm not asking at all for anyone to do it for me, just some help getting started. :) Thanks!

Similar Asks:

  • The supply curve for a product has infinite elasticity. a tax is levied on each unit of the product the likely? - 6. the supply curve for a product has infinite elasticity. a tax is levied on each unit of the product the likely effect will be to:A.reduce the amount the producer receives from each unit sold by the amount of the tax.B. Increase the price the consumer pays per unit by the amount of the taxC.
  • Healthy eating campaign, how does it effect food market? - Have to write an essay, looking particuarly at demand and supply of these goods, with demand and supply curves and all that How would it effect market for pre-prepared food, prices, big companys, fast food etc. etc. Any sensible ideas appreciatedThanks x
  • Keynesian and monetarism economics? - There are 2 major schools of thought surrounding the reduction of the unemployment rate: Keynesian (demand side) economics and Monetarism (supply side) economics. How does each school of thought propose we get to full employment? If you became the president of the US, which strategy would you employ? Explain why. PLEASE HELP THIS IS AN
  • What does the “effective” federal funds rate mean?is this the real US interest rate or just the nominal? - i am writing an essay and have a graph of the federal funds rate (effective).what exactly does this mean?the essay focuses on the effects of increasing interest rates.the monetary expansion which began after the bubble burst and the terrorist attacks,caused interest rates to fall and eventually output to increase back to its normal level.having
  • HELP WITH MY ONLINE TEST! QUICKLY! Macroeconomics!? - Here’s what Im supposed to be doing, which I do NOT understand AT ALL:There will be one big difference between Exam III and the first two exams. Exam III will include a 20 point essay question in which you must explain how commercial banks “create” money. You should consider it a “take home”
  • Could you guys out there re-write this short essay and make sure there are no sentence fragments.? - Male chauvinism extends even into the area of automobile driving, it seems. Believing that they are far better drivers than women. men consider women drivers incompetent, inattentive, and even dangerous behind the wheel.However statistics prove that women are, in fact, safer drivers than men. For example, insurance rates. Insurance rates for women are 20 percent
  • How are monopolies resource efficient and price well? - Can you guys list 3 ways of each? Im stuck on my essay and i have to rebuttal my main points about how monopolies are inefficient and price poorly (price high, low supply)

One Answer to “Economics Question Please Help! :((((((?”

  1. tugless says:

    Currently oil is what about $50/barrel, and would be rising suddenly to about $200/barrel in one day.The operating budgets of many consumers are relatively fixed, so to stay within budget, we’d need to react by immediately driving less, carpooling, telecommuting, and for business they would need to do the same for their deliveries of goods. Some people might immediately retire their large gas guzzler vehicles and buy hybrids as the high cost of fuel shortens their payback period and makes them a more viable choice. Businesses might be more likely to replace fleets with LPG or other alternative fuel vehicle.So I’m expecting to see Demand fall quickly in response to a quick rise in price.And with the fall in demand for Oil, expect a rise in demand for Hybrid vehicles, FFVs, E-85, LPG and other alternative types of fuel.Other oil producing countries may be able to increase their production, with some marginal price increase but not all the way up to $200/barrel. To the extent we can negotiate this, it reduces the impact of the Bin Laden take-over, helping maintain the high demand for oil and preventing large SUVs from being retired quickly for hybrids as might otherwise occur.