Chapter 5: Problem 4

A shift in the supply curve for gasoline in the United States would result if __________. (LO5) a) people decided to travel more by automobile b) the OPEC nations decided to stop sales of crude oil to the United States c) the price of gasoline increased d) the price of gasoline decreased e) the price of mass transit increased

Short Answer

Expert verified

A shift in the supply curve for gasoline in the United States would result if the OPEC nations decided to stop sales of crude oil to the United States (option B). This directly affects the ability of US gasoline producers to produce gasoline, leading to a change in the quantity of gasoline supplied at every price and causing a shift in the supply curve.

Step by step solution

Identifying effects on demand and supply

First, we need to distinguish between options that affect the demand for gasoline and options that affect the supply of gasoline. Changes in demand will not directly result in a shift in the supply curve.

Option A: Increased automobile travel

If people decide to travel more by automobile, this would increase the demand for gasoline. However, it does not directly affect the supply of gasoline, so this option will not result in a shift in the supply curve.

Option B: OPEC stops selling crude oil to the United States

If the OPEC nations decided to stop sales of crude oil to the United States, this would directly affect the ability of US gasoline producers to produce gasoline. Since this would result in a change in the quantity of gasoline supplied at every price, option B would lead to a shift in the supply curve.

Option C: Increased price of gasoline

If the price of gasoline increased, demand for gasoline would decrease, which would, in turn, affect the quantity of gasoline supplied. However, this is a movement along the supply curve, not a shift in the supply curve, so option C is not the correct answer.

Option D: Decreased price of gasoline

Similarly, if the price of gasoline decreased, demand for gasoline would increase, affecting the quantity of gasoline supplied. However, this is still a movement along the supply curve and not a shift in the supply curve, so option D is not the correct answer.

Option E: Increased price of mass transit

If the price of mass transit increased, more people may choose to travel by automobile, which would result in an increase in the demand for gasoline. However, this would not directly affect the supply of gasoline, so option E will not result in a shift in the supply curve. Out of all the given options, option B (the OPEC nations deciding to stop sales of crude oil to the United States) would result in a shift in the supply curve for gasoline in the United States.