Copyright 2002 TecEd

1. Suppose that you are running a business selling DVD and Video movies. Your supplier of DVD movies reduces the cost to you of purchasing movies. You have a fixed amount of space for storing your DVDs and Videos.
    
1. After the reduction in the cost of DVD movies, how might you alter the amount of Videos and the amount of DVDs you buy each month? Explain your answer. (C2)
2. Discuss whether you would change the price you charge your customers for renting a DVD movie. (A2)
    
2. OPEC - the Organisation of Petroleum Exporting Countries - controls a large proportion of the world supply of oil. Petrol, plastic, fertilizers and many other products are made from oil. OPEC decide to reduce the supply of oil. Analyse how this policy might affect the following markets:
    
1. The market for Petrol (C2)
2. The market for Cars (C2)
3. The market for agricultural products e.g. vegetables (C2)
    
3. Using supply and demand analysis, explain how higher wages paid to employees in fast food restaurants (hamburgers etc) might change the market price and quantity for fast food. (C2)