Oil prices rose steadily during the last year - Leaving Cert Economics - Question 9 - 2008
Question 9
Oil prices rose steadily during the last year. State two economic reasons for this development.
State one social cost and one social benefit of the rising prices.
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Worked Solution & Example Answer:Oil prices rose steadily during the last year - Leaving Cert Economics - Question 9 - 2008
Step 1
Reasons (i)
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Answer
Greater demand for oil: Rapid industrialization in countries such as China and India has led to an increased demand for oil, driving prices higher.
Step 2
Reasons (ii)
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Rising production costs: The extraction and production of oil have become more expensive due to depleting resources and geopolitical factors, contributing to higher prices.
Step 3
Social Cost:
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Environmental damage: Increased oil prices may lead to environmentally damaging extraction methods, threatening ecosystems and causing pollution.
Step 4
Social Benefit:
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Public transport: Higher oil prices can encourage consumers to shift to public transport, reducing traffic congestion and promoting more sustainable urban living.
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