Part 2 Due < 5 p.m., 3/2/00

1. Describe the effects of each of the following influences on demand and/or supply of oil. Be sure to indicate (1)which curve(s) shifts, (2)the resulting impact on equilibrium price, and (3)any movement along a curve.

1. A major oil discovery
2. A $5 per barrel tax on oil
3. An improvement in oil recovery technology
4. An unusually hot summer causing an increase in the demand for air conditioning (Oil is used to produce electricity)
5. An increase in energy conservation

2. Under what circumstances will the demand curve be upward sloping. Be sure to describe each situation carefully and give examples. Use complete sentences and good grammar.