Economic Concepts and Models - Global Oil Price - Economics Assignment Help

Assignment Task :

AIMS

The purpose of this task is to demonstrate your understanding of the economic concepts and models you have learned in the course in topics 2, 3 and 4 by relating them to a real world situation.

COURSE OBJECTIVES

These course objectives are covered by the assignment.

CO1. Describe and utilise the fundamental tools, methods and language of economics to analyse resource allocation issues 

CO2. Describe the impact of incentives and use economic models to illustrate how agents and economies respond to incentives 

CO3. Identify the limitations of the market mechanism and analyse the role of government in affecting markets and decision-making in the general economy 

FRAMEWORK FOR EACH ANSWER 

1. Identify the key issues in the questions provided.

2. Analyse these key issues mentioned in the article, within the context of the concepts discussed in the lectures and textbook.

3. Use the appropriate economic model to illustrate the key issues graphically. Fully label the model and clearly indicate where changes occur.

4. Explain the model and discuss the outcome.

5. Provide the list of references used in answering the questions.

TASK DESCRIPTION

Read the news article entitled “Australian petrol prices could soon drop to $1 a litre as oil prices plunge” by Gareth Hutchens and answer the following questions. Specify any assumptions you have made and use clear, concise and coherent arguments. Wherever you use ideas from sources to support your arguments, please make sure you cite them. Please refer to page 5 for more information on assessment criteria and submission. 

QUESTIONS:

1. Use a demand and supply model to explain and illustrate how price in Australia petrol market has been affected by COVID19 pandemic and a fall in global oil price. You need to articulate the determinants that lead to the change 

2. Drawing on the determinants of price elasticity of demand, explaining whether the demand for petrol in Australia is elastic or inelastic. Illustrate the effect of price drop on the total revenue of a petrol station. 

3. If the government decides to impose a tax of 20 cents per litre on petrol to cover the budget deficit, explain and illustrate the impact of the tax on market with a graph, and discuss whether the outcome is efficient by demonstrating the change of consumer’s and producer’s surplus as a result of tax  

4.  If you run a small courier company as the subcontractor for Australia post, explain which component of your costs will be affected by the petrol price drop with the aid of the graph  

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