6. Tyler buys a futures contract from Alex that requires him to buy 1,000 barrel
ID: 1139901 • Letter: 6
Question
6. Tyler buys a futures contract from Alex that requires him to buy 1,000 barrels of oil at $125 per barrel in 48 months. What happens in 4 barrel of oil is $100? Assume cash settlement. (2 pts) 8 months if the actual price per 7. Central planning usually fails because: (1 pt) A) the central planning board is too generous in allocating resources. B) of problems of inadequate demand and supply C) central planners rely on market forces D) of information and incentive problems. 8. After a hurricane knocks out power to thousands of households, the price of electric generators increases threefold. According to economists, why is this economically efficient? (2 pts) Chapter 8: 9. What would be the most efficient way to make generators affordable to all people who need them? (1 pt) A) use a price control to stop generator prices from rising B) give every resident of the hurricane-affected area a tax credit that they can choose to spend on an electric generator if they n eed one C) ship generators to every resident of the hurricane-affected area D) the increase in demand for electric generators should technically cause the price to fall after a hurricane , s o no government action is neededExplanation / Answer
6 Tyler incurs loss of 25(1000)=25000
7 There is information and incentives problems. E. G policy makers don't know what to produce in which amount
8 Because it makes supply equal to demand. Otherwise there will be shortage
9 ship generators....... Hurricane causes disruption in supply while demand rises
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