(Solved): Economics of the energy system Economists contend that the probability of prices rising unstoppably ...

Economics of the energy system

Economists contend that the probability of prices rising unstoppably as the global output of fossil fuels slide down the right side of M. King Hubbert’s model of the peak oil curve is very low (see Figure 3 below).

First, describe TWO reasons why Mark Jaccard (2009) argues that “every commodity, no matter how essential, no matter how coveted, has factors that limit its price,” and why we should not worry like Chicken Little that the world is coming to an end. Second, concerning the demand side of oil, describe TWO short-term responses AND TWO long-term responses to higher oil prices that car owners can make.