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Some examples would be solar and wind power. Practice Problems 1. Consider the market for oil. Suppose the cost of extracting oil from the ground fell. A. What would happen to the extraction rate of oil? What would happen to oil companies” profits? What would happen to the market price of oil? Suppose the demand for oil rose. A. What would happen to the market equilibrium price of oil? What would happen to the extraction rate of oil? What would happen to the profitability of oil producers? Suppose the demand for housing fell, decreasing the market price of lumber. How would this change the timber harvest rate? Suppose the cost of harvesting timber rose. How would this affect the timber harvest rate? Explain why increasing residential land values in forested areas can represent an increase in the opportunity cost of maintaining forest land as a forest. Suppose there is an increase in the demand for camping at organized campgrounds. What impact would this have on the supp
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