d. When an economy slows down, it produces less output and demands less input, including energy,

which is used in the production of virtually everything. A decrease in demand for energy will be

reflected as a decrease in the demand for oil, or a leftward shift in demand for oil. Since the demand

curve is shifting down the supply curve, both the equilibrium price and quantity of oil will fall.

e. Disruption of oil pumping will reduce the supply of oil. This leftward shift in the supply curve will

show a movement up the demand curve, resulting in an increase in the equilibrium price of oil and a

decrease in the equilibrium quantity.

f.

Increased insulation will decrease the demand for heating. This leftward shift in the demand for oil

causes a movement down the supply curve, resulting in a decrease in the equilibrium price and

quantity of oil.

g. Solar energy is a substitute for oil-based energy. So if solar energy becomes cheaper, the demand for
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