1. What has happened to the price of crude oil in 2015? What has
happened to the demand for crude oil in 2015? Is there an economic
theory that supports this relationship? Support your answer with a
diagram. (4 marks) Â
2. In the last 6 months of 2015 oil prices fell by 30% and oil demand has risen by 2%. Based on this data what type of price elasticity does oil demand have? (5 marks) Â
3. Do you agree with the opinion expressed in Source 1 on the price elasticity of demand? Why or why not? (6 marks) Â
4. Would you advise an oil producer to increase oil prices or decrease oil prices based on your analysis in previous questions? Explain and justify your answer with a diagram. (Hint: Think of Topic 4 tests)
5. Based on Source 2 how would the price elasticity of supply have changed since the introduction of shale oil production in 2008? Support your answer with economic theory.
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