Over a two-year period from January 2014 to January 2016, global oil prices fell
ID: 1119619 • Letter: O
Question
Over a two-year period from January 2014 to January 2016, global oil prices fell from over $100 per barrel to $25 per barrel. The world supply of oil (aided by many more countries including the United States drilling for oil) dramatically outpaced demand as economic growth in oil-thirsty countries such as China slowed. Meanwhile, fuel prices dropped to 10-year lows, resulting in a spike in car and truck sales and an increase in airline travel.
Analyze the effects of rising and falling oil prices on consumer behavior and how they affect the environment.
Explain how oil prices and fuel consumption create a catch-22 for the environment.
Explanation / Answer
Rising oil price of oil will reduce the demand for the automobiles such as cars, motorcycle etc. Alternatively falling oil prices will increase the demand for automobiles.
An increase in demand for atomobile means a larger amount of quantity purchased. An increased automobiles had an adverse impact on environment. Increased use of automobiles causes pollution and harms environment and causes various disease. Similarly, fall in quantity demanded will im prove environment and air quality as there will be low pollution.
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