Comments on: Econ question for practice? http://hurricanequestions.com/econ-question-for-practice.htm Sun, 20 May 2012 18:23:05 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Charmaine B http://hurricanequestions.com/econ-question-for-practice.htm/comment-page-1#comment-12128 Charmaine B Sun, 25 Jul 2010 04:48:28 +0000 http://hurricanequestions.com/econ-question-for-practice.htm#comment-12128 Since the hurricane has disrupted the supply of oil, the aggregate supply (AS) will decrease. The AD will remain relatively unchanged from this event. Price of oil will increase, causing inflation since almost everything needs oil. For those working in the refinery, they will lose their jobs because the infrastructure is destroyed. However, even with an increase in oil prices, they will still have their jobs because the oil has inelastic demand, consumers are able to absorb the increase in wage if they demanded. When oil prices increase, some people will go unemployed because firms will cut down cost of production by retrenching workers. Since the hurricane has disrupted the supply of oil, the aggregate supply (AS) will decrease. The AD will remain relatively unchanged from this event.

Price of oil will increase, causing inflation since almost everything needs oil. For those working in the refinery, they will lose their jobs because the infrastructure is destroyed. However, even with an increase in oil prices, they will still have their jobs because the oil has inelastic demand, consumers are able to absorb the increase in wage if they demanded.

When oil prices increase, some people will go unemployed because firms will cut down cost of production by retrenching workers.

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