ATMC BUS502 Principles of Economics for Accountants
Assessment Task 2 – Responses to articles
Article 3: DUE via Safe Assign 6pm Sunday 2nd June
“High petrol prices may push up the cost of fresh food for consumers” by Nikolai Beilharz from ABC News from 18th October 2018. Available at:
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, please list at least the URL of your source. Possible total for this assessment task is 15 marks.
The diagrams below show the market for fresh food. Illustrate and explain what happens to the equilibrium price and quantity in the following scenarios.
(a) According to the article “a rise in the petrol and diesel prices could also lead to a rise in the price of fresh foods”. Use the supply and demand diagram below to illustrate and explain why.
Figure 1.1 Market for fresh food
(b) According to the article “consumers are also changing what they buy as a result of high prices”. Use the supply and demand diagram below to illustrate and explain the effects in the market for fresh food of this change in consumer tastes.
Figure 1.2 Market for fresh food
The article stated that “farmers often say they are price takers.” Explain what this concept means in term of market structure and analyse at least other three characteristics of this type of market.
According to the article consumers “instead of buying a t-bone steak they might buy sausages”. Explain in your own words what this means in terms of the cross-price elasticity of demand.