Question

When Hurricane Katrina shut down many oil refineries, the supply curve for oil

A. shifted to the left
B. shifted to the right
C. stayed the same
D. became equal to zero

Answer 1

Answer: Option A

Explanation: In simple words, supply refers to the quantity that the producer is willing to offer and sell to the market at a given price. When the natural calamity shuts down the oil refineries the ability of the producer to supply oil will decrease eventually leading to decrease in supply.

The decrease in supply will shift the supply curve to the left. Hence the correct option is A.

Answer 2

When Hurricane Katrina shut down many oil refineries, the supply curve for oil shifted to the left. This is because the oil refineries in the Gulf of Mexico shut down which meant the supply for oil dropped.