1. Which economic principle is applicable in each of the following cases? Justify your answer. (2 marks each) a. Saudi Arabia and Russia, the two largest producers of oil, increased the production of oil in March 2020, leading to a sharp decrease in the price of oil, worldwide. A further decrease in the global demand for oil due to the COVIDlQ pandemic exacerbated the problem by decreasing the oil price below zero. As a result, 50,000 jobs vanished in the US oil industry. Principle # 6 Markets are usually a good way to organize economic activity. Saudi Arabia and Russia being the two largest oil producers have a large impact on the price and production of oil which in turn affects demand. The pandemic caused a huge ripple in the need for oil and demand dropped which also led to many jobs lost. Principle 4: People respond to incentives