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Suppose That War in the Middle East Reduces the Supply

Question 27

Multiple Choice

Suppose that war in the Middle East reduces the supply of oil forcing the country to economize on oil. How should the central planner optimize the economic problem under this situation?


A) shift oil out of uses where good substitutes for oil exist
B) supply oil for uses where few substitutes for oil exist
C) Both of the answers are correct.
D) Neither of the answers is correct.

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