There are two important issue dimensions in country X - the economy and social policy. A description of the party system is shown in the Figure 4 below. Specifically, Figure 4 indicates the location of the three parties in country X on each of the two issue dimensions. No party is large enough to form a majority government on their own. Any two parties could form a government coalition and enjoy a majority. We are going to examine what governments might be equilibrium governments.

a) Indicate all of the possible governments that might form on Figure 4. In other words, where would an AB coalition be located, where would a C minority government be located, where would a CA coalition be located etc.? You should have 9 potential governments.

Figure 4 Economic Policy BB CC AA Social PolicyFigure 5 Economic Policy BB CC AA Social Policy