ECS1501
Assignment 3
DUE 21 July 2025
, ECS1501 Assignment 3 (2025)
Due Date: 21 July 2025
Student Name: [Insert Name]
Student Number: [Insert Student Number]
Question 1 (12 marks) – Maximum 100 Words
(i)
An economist would describe the market condition as a shortage, also known as
excess demand. This occurs when the current market price is set below the equilibrium
level, resulting in the quantity demanded exceeding the quantity supplied. At this
lower price, more consumers are willing to purchase the good, but suppliers are
unwilling to provide enough, leading to a gap between supply and demand (Mankiw,
2021).
(ii) Diagram: Market for Oil Showing a Shortage
markdown
CopyEdit
Price
│
│ S
│ /
│ /
│ / ← Shortage (Excess Demand)
│--------/------------------- P₁ (Price below equilibrium)
│ /|
│ /|
│ / |
│ / |
│ / |
Assignment 3
DUE 21 July 2025
, ECS1501 Assignment 3 (2025)
Due Date: 21 July 2025
Student Name: [Insert Name]
Student Number: [Insert Student Number]
Question 1 (12 marks) – Maximum 100 Words
(i)
An economist would describe the market condition as a shortage, also known as
excess demand. This occurs when the current market price is set below the equilibrium
level, resulting in the quantity demanded exceeding the quantity supplied. At this
lower price, more consumers are willing to purchase the good, but suppliers are
unwilling to provide enough, leading to a gap between supply and demand (Mankiw,
2021).
(ii) Diagram: Market for Oil Showing a Shortage
markdown
CopyEdit
Price
│
│ S
│ /
│ /
│ / ← Shortage (Excess Demand)
│--------/------------------- P₁ (Price below equilibrium)
│ /|
│ /|
│ / |
│ / |
│ / |
