Responses to Articles on National Fuel Strike

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BUS102 Introduction to Economics
Assessment Task 2 – Responses to
articles
Article 2: DUE via Safe Assign 5pm
Sunday 5th May
Name:
Student ID no:
Tutor’s name:
Article Title:
‘National fuel strike: Petrol price pain prompts fed-up motorist to call
for fuel boycott’byKathy Sundstrom, Kylie Bartholomew and Rob
Blackmore,fromABC news from 24th October 2018. Available at:
https://www.abc.net.au/news/2018-10-24/will-a-boycott-on-fuel-make-it-
cheaper-for-you/10395474
Instructions:
Access the article at the URL given above and read it carefully. Answer the
questions and complete the diagrams in the spaces provided below. Use full
sentences. If you use any references other than the study guide and the article,

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please list at least the URL of your source. Please read the marking rubric
provided in the separate file before answering the questions. Total markfor this
assignment is 15.

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Question 1
According to the article, “the increase of the cost of fuel over the past year was
due to an increase in price of the crude oil”. Use the supply and demand diagram
below to illustrate and explain why.
Fig. 1.1 Shift in equilibrium owing to increase in crude oil price
The article highlights that the fuel price has increased which has caused
immense unrest amongst the people. The rise in fuel prices can be critically
analysed with regards to demand supply concepts. During the time period under
consideration, there has been a steep increase in the international crude oil
which has led to higher production cost for the fuel producers. This is because
the main raw material involved in the production of various fuels is crude oil. On
account of this increase in cost, there has been a decrease in the supply
reflected by a leftward shift in the supply curve which is shown in the relevant
diagram above. The demand function on the other hand does not alter and
remains the same.
The change in equilibrium is clearly is clearly highlighted in the diagram shown
above. Compared with the old equilibrium point before the crude oil price, the
new equilibrium tends to have a higher price of fuel owing to higher production
costs. Also, there is some decrease in the quantity demanded as compared to