Energy Economics – example questions
These are taken from previous Energy Economics exams as examples of the type of questions that
will be in the Summer 2021 exam:
Section A: short answer questions

What are the drivers for the UK energy system to become more flexible, and what options
can provide increased flexibility?

Give two factors that lead to the price of energy from new technologies to increase, and two
factors that lead to the price to decrease. Provide an example in each case.

How can the actions of OPEC be described using the Prisoner’s Dilemma? What does the
‘payoff matrix’ show?

Define the price elasticity of demand, and the factors that can affect it.

What are the assumptions made for (a) perfect competition, and (b) a monopoly?

Use a diagram to describe a Marginal Abatement Cost Curve, and the associated policy
interventions that can be applied to meet emissions reduction objectives.

Describe how current oil production and proved reserves are concentrated across the
globe, and the trends in these over the last 30 years.

Describe with diagrams: (i) how electricity is dispatched according to the merit order, and (ii)
what a screening curve shows.

What are the elements of the ‘energy trilemma’?
Section B: longer answer questions

Describe the barriers that prevent energy efficiency reaching its potential.

How and why has the oil price changed since summer 2018? What factors could influence
future changes?

What is the purpose of the economic regulation of the electricity market? Describe the two
main forms of electricity market regulation.

Discuss why energy technology costs are expected to reduce over time, and the governance
styles through which innovation has been supported. Give examples of energy technologies
where cos reductions have, and have not, been seen in recent years.

Describe how the UK’s electricity market has changed since 1980, outlining the main market
mechanisms that have been introduced.