i. Historically (prior to fracking), the US has held heavy interest in oil from Canada and Latin America despite it being more expensive than from OPEC. (Hint: use some intuition and the concept of national security risk).

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
Section: Chapter Questions
Problem 9RQ: In what ways (it) company investments in research and development create positive externalities?
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show iii. on the graph and explain. 

sd1 is long run domestic supply curve

sd2 dometic supply curve

Pw1 observed world price

Pw2 includes vulnerability premium 

Pw3 adds in the per unit climate change damages

 

$/Unit
Domestic Demand
S d2
d1
w3
Pw2
P,
w1
Quantity
А В
Figure 7.2 The National Security Problem
Transcribed Image Text:$/Unit Domestic Demand S d2 d1 w3 Pw2 P, w1 Quantity А В Figure 7.2 The National Security Problem
iii. Historically (prior to fracking), the US has held heavy interest in oil from Canada and
Latin America despite it being more expensive than from OPEC. (Hint: use some intuition
and the concept of national security risk).
Transcribed Image Text:iii. Historically (prior to fracking), the US has held heavy interest in oil from Canada and Latin America despite it being more expensive than from OPEC. (Hint: use some intuition and the concept of national security risk).
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