Economics HL paper 3

Economics HL paper 3 - c 2 hours IB DIPLOMA PROGRAMME...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ECONOMICS HIGHER LEVEL PAPER 3 Friday 7 November 2003 (morning) 2 hours N03/330/H(3) IB DIPLOMA PROGRAMME PROGRAMME DU DIPLÔME DU BI PROGRAMA DEL DIPLOMA DEL BI c 883-036 6 pages INSTRUCTIONS TO CANDIDATES y Do not open this examination paper until instructed to do so. y Section A: answer one question. y Section B: answer one question. y Use diagrams where appropriate.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
SECTION A Answer one question from this section. Either Question 1 Over a barrel 1 It is not easy running an oil cartel these days. With forecasts for global demand so unreliable and supply figures so weak at best, how is OPEC to decide exactly how many barrels to take out of the ground and how many to leave in? 2 That was the problem facing OPEC ministers when they met in Vienna on January 17th. Over the past two years the price of oil has fallen to $10 per barrel, then increased to $35 per barrel last year. In the days before they met, the price varied within OPEC’s target range of $22 – $28 per barrel. Last year, in the face of strong demand, it increased production quotas four times by a total of over 3.5 million barrels per day. Yet at the Vienna meeting OPEC ministers unanimously agreed to reduce quotas by around 1.5 million barrels per day from February 1st. 3 Why cut now? After all, stocks of oil remain low in most parts of the world and the big consuming countries, such as the United States and members of the European Union have been arguing for no cuts. The reason for the cut is OPEC’s memory of what happened three years ago. They agreed to raise output just as the Asian economic crisis was beginning. This led to a price collapse. To avoid that mistake again they have become very sensitive to any weakening of demand. 4
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

Economics HL paper 3 - c 2 hours IB DIPLOMA PROGRAMME...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online