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j19 23

June cambridge

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19 views

j19 23

June cambridge

Uploaded by

shahzad.83900
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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A. Describe, using Fig. 1.1, the change in oil production in Nigeria between 2015 and 2016.

(2)
• Oil production has fallen over the period, From around 2.2 million barrels to around 1.6 million
barrels. The most rapid fall was between quarter 1 and quarter 2 in 2016
B. Compare, using supply and demand diagrams, how OPEC’s decisions affected the world price of
oil in 2014 and in 2016. (4)
• increase in the supply of oil in 2014 and the fall in price.
• decrease in the supply of oil in 2016 and the rise in price.
C. ‘The demand for OPEC’s oil is price inelastic.’ What evidence is there in the information to
support this claim? (2)
• Fall in world price (of 60%) and fall in OPEC oil revenue (of 45%)
• This means that since the % fall in price must be greater than the % rise in quantity demanded
and the price must be inelastic
D. Fig. 1.2 shows that production in Nigeria’s oil sector declined sharply from Q1 of 2016. During
this period, total national output for Nigeria fell by an annual rate of only around 2%. What
can be inferred from this about the relative importance of the non-oil sectors in Nigeria? (2)
• The data refers to a fall in GDP and an economic slowdown due to the increase in 2015 and up to
Q3 in 2016.The fall in non oil growth rate is not as severe as for oil growth. This would indicate
that the non oil sector is of much greater economic importance for the economy
E. Analyse, using aggregate demand and aggregate supply, two likely effects of OPEC’s policies on
the economy of Nigeria. (4)
• From 2014 to 2016 OPEC increased the supply of oil and reduced price.
• In late 2016 OPEC reduced the supply of oil and increased price
F. Discuss, with the help of the information, the extent to which OPEC will be able to control the
world price of oil. (6)
• The data states that OPEC produces half of the global production of oil. By varying the volume of
• (a) Using examples, explain why merit goods
are said to be under-consumed and demerit
goods are over-consumed. [8]
• Merit goods (positive externality)with example and how
govt increase the production and consumption of merit
goods
• Demerit goods (negative externality) with example and
how govt decreases the production and consumption of
demerit goods
• Merit goods are under produce and under consume due
to the lack of information and poor decision making
(takes into account short-run costs but ignores long-run
benefits)
Education , plantation
• Demerit goods are over produce and over consumed
due to the lack of information (due to private benefit
and ignores social benefit.
• (b) Discuss whether merit goods should
always be subsidised and demerit goods
always taxed. [12]
• benefits of subsidisation of merit goods
• other methods to increase their consumption
• benefits of taxation of demerit goods
• other methods to decrease their consumption
• merit goods should always be subsidised and
demerit goods should always be taxed

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