Why did the oil price shocks of the 1970 s affect the economy differently than the oil price shocks in $2007 ?$...

Why did the oil price shocks of the 1970 s affect the economy differently than the oil price shocks in $2007 ?$

Everyone said today we're gonna be comparing these buttons spots which are looking at gas prices in America. So the first question asked us to compare the distribution of these prices over these three years on. We can learn a lot from these bad thoughts. So to start with, we can see that in 2011 the destruction was prove symmetrical. We could see from this median line that it was more or less in the middle of this box here. And then in 2009 it was really left skewed to doesn't turn the opposite was very right, skewed. We could see you got some outlines here in 2010 or any other allies that we can see in 2009 in 2000 and 11. Looking at the median for these values, beating 2009 is about 2.5 2010. Two point a ish does 11 3.6, and so the median prices guests been steadily increasing. And we can say that for definite, because the media is a set of specific number, whereas, you know, comparing specifics, we can't necessarily say that all the prices to those 11 were higher than do have them 10 because weak, these outliers might show a lot of overlap here. So the second part, this question is asking us in which year with prices least stable and so we can look at this using the in school trial ranges. So the integral to ratio is not. It is clearly the widest, as is the range in general. Right here is certainly much wide leaders in turn and is wide open 2011 as well. We do have out lies in 2010 but that doesn't mean that it was the last variable. It just means that we had a couple of values outside of the expected range because the set was so not variable. It's kind of hard to get your head around, but essentially all of the values that we had in this year it was so close together that when they were just a little bit out, they were unexpectedly far out. You know, they were they were enough to be rid of outliers, and so that is a symbol. But actually, this is a It's a very taught me neck and set of data, so you shouldn't see these outlines to go. Oh, this is really unpredictable is definitely this one. There's such a wide range of values, and you can justify about using the range in total range. And yeah. So, to the house, the nine on was the least variable, Yeah.

So they give us the price of gas in since on average per each month in the U. S. And they want us to find the average rate of change of the price of gas per month per gallon over each of the three time periods that they have listed there. So let's just go ahead and start with a well before we do that. It may be a good idea to actually list out what the's bunts are as a number, because we can't really subtract July from January. So January is the first month of in July should be the seventh, and then December would be the 12th. And you could always just count the tally marks to get those now for January to July. So we want the points would be one and then 3 29 and then for July at 74 35. And then let's just go ahead into December. So December is 12 1 95 suffer January. We're going to use the point for July in January, so it's gonna be 4 35 minus 3 29 if we just follow the average rate of change formula they give us in the book and then it be seven minus one. And so for 35 minus 3 29 10 7 minus 16 So divide those, and that should give us something around 17.67 cents to remember this is in dollars. But since and then for July to December, we want to use these two points. So it's going to be 1 95 minus 4 35 all over 12 minus seven. So we would have someone 95 minus for 35 is negative 240 then in the denominator 12 minus seven. Once we divide those, that should give us negative 48 since and then, lastly, will have January to December, and that's going to have 1 95 minus 3 29 all over 12 minus one, and so in the numerator would have won 95 minus 3 28 which is negative 1 33 Then we would divide by 11 in the denominator, not 1 28 1 or 3 29 I should say, uh, but you re divide those. That should give us negative 12.18 cents, so these would be the three average changes. Pour gas. Her month per gallon

Okay, let's look at an example of expectations of price and supply ships. Now let's say that we're looking at a market for oil. And let's say that, uh, prices were falling, but some news came out. Some analysts. We're very convince that the oil prices were going to rise soon, Right? That's an expectation of price. Prices are going to increase when people are very sure about that. Well, what does this mean for the supply off oil in this market? Well, if these firms believe the price is going to be higher in the near future, then they air going to store their oil supplies for a later time, so the market would experience a decrease in supply. All right, so we would have a shift of the supply curve to the left. This would be what we would expect to happen if oil producers were expecting prices to rise in the near future. Right? All firms selling oil would think, Well, I'll make more money if I sell this later. So let me store it for now. In the market experiences decreasing supply

Okay, let's see that a 2015 article there was released on the oil market stated that there was a global clod off crude oil and the prices of oil began to shrink. So let's address three different things. What is meant by this glove? Well, a global supply glut that the article describes is a result off a significant increase in the supply of oil relative to the Demet. This kind of leads to, ah, hire quantity supply relative to the quantity demanded. So, as we have learned before, this is a sore plus in the market for oil. Now to the next point, What is the effect of the globe on prices? Well, as we know, when the market experiences a sir plus, it pushes the price down because a decrease in the price off the oil will increase the quantity, demanding and decrease the quantity supply. So the surplus will go away until it reaches the equilibrium quantity. So what make the blood start to shrink? So as the price falls in response to the surplus again, oil producers are going to decrease the quantity supplied, and consumers are going to increase the quantity that they demand. So once we reached that, a delivery, um, point, the glut will be eliminated