Question 1 Figure 1 : Daily spot crude oil prices ( Jan 2020 to Dec 2021) 530 Jan Apr Det Crude oil prices increased in 2021 as increasing COVID-19 vaccination rates, loosening pandemic-related restrictions, and a growing economy resulted in global petroleum demand rising faster than petroleum supply. The spot price of Brent crude oil, a global benchmark, started the year at $50 per barrel (b) and increased to a high of $86/b in late October before declining in the final weeks of the year. Brent's 2021 annual average of $71/b is the highest in the past three years. The price of West Texas Intermediate (WTI) crude oil traced a similar pattern to Brent and averaged $3/b less than Brent in 2021. Source: Crude oil prices increased in 2021 as global crude oil demand outpaced supply - Today in Energy - U.S. Energy Information Administration (EIA) Required: a. Based on the above statement, discuss FOUR (4) factors that caused the fluctuation in the equilibrium price of crude oil by using a separate demand and supply diagram. (14 Marks) b. Prices in most market are free to rise or fall to their equilibrium levels, no matter how high or low those levels might be. However, goverment sometimes concludes that supply and demand will produce prices that are unfairly high for buyers or unfairly low for sellers, So, government may place legal limits on how high or low a price or prices may go. With the rapidly rising of the crude oil price, it caused to increase in gasoline price and lead to increase the equilibrium price in the market. This rapidly rising price of gasoline greatly burdens low- and middle-income household. Analyse how government policy can adjust on this situation to keep gasoline remain affordable for these household. (6 Marks) (Total: 20 Marks)