, ECS1501 Assignment 3 (COMPLETE ANSWERS) 2025
- DUE 21 July 2025; 100% TRUSTED Complete,
trusted solutions and explanations.
Question 1 (12 marks) Maximum word count: 100 words
This question is based on the following cartoon:
(i) What word/words will an economist use to describe the market
condition depicted in the cartoon
The market condition shown in the cartoon is best described as a
surplus. This occurs when the quantity of oil supplied exceeds the
quantity demanded at the prevailing price. Economists refer to this as a
situation of excess supply. In the context of the oil market, this could
happen due to a drop in global demand (perhaps from slower economic
growth) or an increase in production from oil-exporting countries.
Producers may continue supplying oil at high levels despite falling
prices, causing inventories to build up and prices to fall further. A
surplus creates downward pressure on prices as sellers compete to
offload their excess stock.
(ii) Draw a diagram of the market for oil that illustrates the market
condition depicted in the cartoon.
The diagram would show a standard supply and demand graph for oil.
On the vertical axis, price is indicated, and on the horizontal axis,
quantity of oil. The supply curve (S) slopes upward and the demand
- DUE 21 July 2025; 100% TRUSTED Complete,
trusted solutions and explanations.
Question 1 (12 marks) Maximum word count: 100 words
This question is based on the following cartoon:
(i) What word/words will an economist use to describe the market
condition depicted in the cartoon
The market condition shown in the cartoon is best described as a
surplus. This occurs when the quantity of oil supplied exceeds the
quantity demanded at the prevailing price. Economists refer to this as a
situation of excess supply. In the context of the oil market, this could
happen due to a drop in global demand (perhaps from slower economic
growth) or an increase in production from oil-exporting countries.
Producers may continue supplying oil at high levels despite falling
prices, causing inventories to build up and prices to fall further. A
surplus creates downward pressure on prices as sellers compete to
offload their excess stock.
(ii) Draw a diagram of the market for oil that illustrates the market
condition depicted in the cartoon.
The diagram would show a standard supply and demand graph for oil.
On the vertical axis, price is indicated, and on the horizontal axis,
quantity of oil. The supply curve (S) slopes upward and the demand
