Diagrams

Question 1

PPC (constant and increasing)

Answer 1

Both: touching axes
Constant: linear
Increasing: concave

Question 2

PPC to show economic development

Answer 2

One of the axes should be education or healthcare

Question 3

PPC to show trade/comparative advantage

Answer 3

Constant, linear!!!

Question 4

PPC to show OCs of investment

Answer 4

Axis 1: consumption goods
Axis 2: capital goods

Question 5

Circular flow of income

Answer 5

See on page 3

Question 6

Circular flow of income + withdrawals and injections

Answer 6

See page 3

Question 7

Price as a signal and incentive

Answer 7

Market for green pens after a change in preference for green pens
See page 9

Question 8

PED elastic and inelastic

Answer 8

Only demand curve
Check page 18

Question 9

PED inelastic and elastic + tax

Answer 9

Demand and supply curve
Calculate tax incidence and gvt spending
Check page 19

Question 10

YED all types of elasticities

Answer 10

Engel curve
Check page 21

Question 11

PES elastic and inelastic

Answer 11

Page 24

Question 12

Maximum price

Answer 12

Show excess demand and black market price
Check page 27

Question 13

Minimum price

Answer 13

Show excess supply
Check page 28

Question 14

Minimum wage

Answer 14

Check page 29 (label axes well)

Question 15

Subsidy

Answer 15

Identify subsidy
Pg 32