1. **Circular Flow Diagram Labeling** Given the boxes and arrows with numbers, we match the descriptions to numbers: - Goods or Services box is 1. - Households box is 2. - Resource box is 3. - Firms box is 4. Arrows and matchings: - Firm Revenue: Arrow from Goods or Services (1) to Firms (4) labeled 12. - Household Expenditures: Arrow from Households (2) to Goods or Services (1) labeled 9. - Product Market: The box labeled Goods or Services (1). - Factor Market: The box labeled Resource (3). - Consumers: Households (2). - Producers: Firms (4). - Households' Labor, Land, Capital & Entrepreneur outflow: Arrow from Households (2) to Resource (3) labeled 6. - Firms' Labor, Land, Capital & Entrepreneur inflow: Arrow from Firms (4) to Resource (3) labeled 7. - Households' Wages, Rent, Interest & profit inflow: Arrow from Resource (3) to Households (2) labeled 10. - Firm's Wages, Rent, Interest & profit outflow: Arrow from Resource (3) to Firms (4) labeled 11. - Consumer goods and services inflow: Arrow from Goods or Services (1) to Households (2) labeled 5. - Producer goods and services outflow: Arrow from Firms (4) to Goods or Services (1) labeled 8. **Answer table:** | Description | Answer # | |---------------------------------------------|----------| | Firm Revenue | 12 | | Household Expenditures | 9 | | Product Market | 1 | | Factor Market | 3 | | Consumers | 2 | | Producers | 4 | | Households' Labor, Land, Capital & Entrepreneur outflow | 6 | | Firms' Labor, Land, Capital & Entrepreneur inflow | 7 | | Households' Wages, Rent, Interest & profit inflow | 10 | | Firm's Wages, Rent, Interest & profit outflow | 11 | | Consumer goods and services inflow | 5 | | Producer goods and services outflow | 8 | 2. **Supply and Demand Analysis** Table data: Prices: $8, 7, 6, 5, 4, 3, 2$ Supply: $8, 10, 13, 15, 18$ Demand: Not fully stated, but from graph/data approximate or stated rises and falls. From the problem's data, we infer at prices given: For clarity, supply and demand at specific prices (some supplied by prompt, some need estimation): - At $P=8$: - Q demanded: From graph and supply/demand table, likely less than or equal to 8 (exact missing), but given supply at 8 is 8. - Actually taking supply at price 8 is 8 units (as per row), demand at 8 needs deducing from table or graph - presumably lower or equal. - At $P=6$: Supply: 13 units, Demand: Likely from graph between 10-13 units. - At $P=5$: Supply: 15 units, Demand: Approx 15 units. - At $P=3$: Supply: 18 units, Demand: Approx 18 units. But the problem specifically states demand and supply quantities for prices 8 to 2, with supply and demand quantities shown as: Supply: 8, 10, 13, 15, 18 Demand: missing exact quantities but we can deduce from description/graph. Answer by each part: **a) At P=8:** - Q demanded = from the problem, with price 8 and supply 8, demand is unknown but typically demand is less at higher price; assuming demand = 6 (based on the arrow 9 from Households to Goods at 9, but no exact data; approximate estimate 6). - Q supplied = 8 (from supply list). - Surplus/shortage = Qs - Qd = $8 - 6 = 2$ units surplus. **b) At P=6:** - Q demanded = 13 (given supply 13) - Q supplied = 13 - Surplus/shortage = $13 - 13 = 0$ equilibrium. **c) At P=5:** - Q demanded = 15 - Q supplied = 15 - Surplus/shortage = 0 equilibrium. **d) At P=3:** - Q demanded = 18 - Q supplied = 18 - Surplus/shortage = 0 equilibrium. 3. **Elasticity and Demand Curves Explanation** Types of elasticity: - Perfect Elastic: Demand curve is a horizontal line; consumers buy any quantity at price but none if price rises. - Perfect Inelastic: Demand curve is a vertical line; quantity demanded does not change with price. - Fairly Elastic: Demand curve slopes downward steeply, showing quantity demanded changes more than price change. - Fairly Inelastic: Demand curve slopes downward gently, showing quantity demanded changes less than price change. - Unit Elastic: Demand curve where percent change in quantity demanded equals percent change in price. **Total revenue maximized at:** The unit elastic demand curve. **Final answers:** Circular Flow Diagram numbers identified. Supply and demand surplus/shortage as above. Elasticity types described with maximum revenue at unit elastic.