Natural Gas Boom Technological improvements in hydraulic fracturing, or "Fracking," have decreased the cost of extracting smaller pockets of natural gas. What affect does this have on supply and demand as well as on the equilibrium price and quantity?
Lower extraction costs will cause the supply curve to shift to the right. Consumers move down their demand curves to a lower equilibrium price and higher quantity consumed.
You might also like to view...
Which of the following statements is TRUE?
A) Bank failures inflict serious financial harm on individual depositors. B) Bank failures do not inflict serious financial harm on individual depositors. C) Bank failures inflict not only serious financial harm on individual depositors, but also harm the macroeconomic stability of the economy. D) Bank failures inflict serious financial harm on individual depositors, but fortunately do not harm the macroeconomic stability of the economy. E) Bank failures only inflict serious financial harm on the macroeconomic stability of the economy.
Illustrate the effect of the Fed purchasing $50 million worth of mortgage-backed securities on the Fed's balance sheet
What will be an ideal response?
If the demand for steak (a normal good) shifts to the left, the most likely reason is that:
A. cattle production has declined. B. the price of steak has risen. C. the price of cattle feed has gone up. D. consumer incomes have fallen.
Suppose that everyone is risk neutral and buyers cannot identify the lemons. The expected value of a used car is $8,000. No good cars will be sold in this market
A) unless the sellers of good cars place a value greater than $8,000 on their cars. B) unless the sellers of lemons place a value greater than $8,000 on their cars. C) unless sellers engage in cheap talk. D) unless the sellers of good cars place a value lesser or equal to $8,000 on their cars.