Question 1 Define and explain the following terms. Please use diagrams and relevant examples where possible (3 marks each) a) Price Floor b) Producer Surplus e) Depreciation d) Law of Demand e) Inflation Question 2 The table provides data for the production levels and prices for all the goods in an economy. Using 2016 as the base year: Good Patty 2016 S0 2017 55 Volume $170 55 Price $140 Coco Bread Volume 60 $80 Price $70 a) Calculate the GDP at current prices (Nominal GDP) for both years. (3 marks) b) Calculate the GDP at base year prices (Real GDP) for both years. (3 marks) c) How much has this economy grown, in real terms, between 2016 and 2017? (4 marks) Question 3 a) In each case, identify the type of market failure and suggest a possible and relevant solution i. You are allergic to nuts but unknowingly order a dessert containing nuts from the restaurant where you are currently dining. (2 marks) iiA bauxite-manufacturing firm drills for bauxite and emits harmful particles into the air which ultimately affects residents in the nearby communities. (3 marks) b) Explain what is meant by "The Tragedy of The Commons" (5 marks) e) What are public goods and why must they be provided by the government ? (5 marks)