Report on Events Impacting the Supply and Demand of Oil

Deliverable 2 - Report on Events Impacting the Supply and Demand of Oil Competency Explain and demonstrate knowledge of concepts including the supply/demand relationship, price ceilings and floors, and market surpluses and shortages.

Course Scenario Oil Company X is a large oil refinery which has been expanding and taking on new investment projects. Recently, they have considered building a pipeline that stretches across the United States, from Canada to New Orleans.

The Board is considering a proposal to increase their oil stores to better prepare for events that impact the market price of oil. They have asked you, as a member of the Cost Department, to determine events that effect the price of oil. They have requested a report explaining the various effects of these events on equilibrium price and quantity.

Instructions As a cost analyst at your firm, you are asked to evaluate the effects that the following scenarios will have on the supply and demand of oil in the oil market. You will submit a PowerPoint document with Notes on each slide with any relevant graphs, including a narration of the shift changes as if you were explaining them to the Board.

Using the drawing tools in PowerPoint, graph the changes to the supply and demand curves in response to the following events:

1. Regulations are passed which restrict drilling in many areas of the U.S. to preserve protected areas.

2. The U.S. has a large increase in birth rate and population. 3. A recession occurs. 4. There is an increase in availability of affordable, alternative energy

sources.

***Only one curve (supply or demand) will shift for each of these events.***

Be sure to provide an oral explanation to justify why the supply and/or demand curve would shift, the direction of the shift, and the new resulting equilibrium price and equilibrium quantity. Remember that you do not need to include actual figures, but rather explain if the price and quantity would be increasing or decreasing. You can use the drawing tools within PowerPoint to draw your graphs. Also, be sure to include the change in the resulting equilibrium price and equilibrium quantity if any curve shifts occur. Also include Notes on each slide to present to Owners.

Grading Rubric

F F C B A

0 1 2 3 4 Not

Submitted No Pass Competence Proficiency Mastery

Not Submitted

Introduction and/or conclusion did not summarize the changes in supply or demand curves and impact on price and quantity.

Introduction and/or conclusion did summarize the changes in supply or demand curves and impact on price and quantity.

Introduction and/or conclusion did not summarize the changes in supply or demand curves and impact on price and quantity, and used clear examples of each.

Introduction and/or conclusion did not summarize the changes in supply or demand curves and impact on price and quantity, used clear examples of each, and included a well-defined synopsis of the report goals.

Not Submitted

Explanation of Event 1 did not summarize the changes in supply and/or demand curves, or curves shifts were incorrect.

Explanation of Event 1 summarized the changes in supply and/or demand curves correctly, but did not adequately explain changes in equilibrium price and quantity.

Explanation of Event 1 summarized the changes in supply and/or demand curves correctly, adequately explained changes in equilibrium price and quantity, and used clear examples of each.

Explanation of Event 1 summarized the changes in supply and/or demand curves correctly, adequately explained changes in equilibrium price and quantity, used clear examples of each, and included well-defined reasons for proposal recommendation.

Not Submitted

Explanation of Event 2 did not summarize the changes in supply and/or demand curves, or curves shifts were incorrect.

Explanation of Event 2 summarized the changes in supply or demand curves correctly, but did not adequately explain changes in

Explanation of Event 2 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price

Explanation of Event 2 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price and quantity, used clear examples of each, and included well-defined

equilibrium price and quantity.

and quantity, and used clear examples of each.

reasons for proposal recommendation.

Not Submitted

Explanation of Event 2 did not summarize the changes in supply or demand curves, or curves shifts were incorrect.

Explanation of Event 2 summarized the changes in supply or demand curves correctly, but did not adequately explain changes in equilibrium price and quantity.

Explanation of Event 2 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price and quantity, and used clear examples of each.

Explanation of Event 3 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price and quantity, used clear examples of each, and included well-defined reasons for proposal recommendation.

Not Submitted

Explanation of Event 4 did not summarize the changes in supply or demand curves, or curves shifts were incorrect.

Explanation of Event 4 summarized the changes in supply or demand curves correctly, but did not adequately explain changes in equilibrium price and quantity.

Explanation of Event 4 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price and quantity, and used clear examples of each.

Explanation of Event 4 summarized the changes in supply or demand curves correctly, adequately explained changes in equilibrium price and quantity, used clear examples of each, and included well-defined reas