1. a) Draw a production possibilities frontier (PPF) for a society that produces two goods, guns and wheat. Suppose this society has two political parties, party R (who want a strong military) and party L (who want a smaller military). Show points on your diagram that party R and party L chooses. b) Show graphically whether your PPF will change if all the resources used for both the goods were equally suitable for production of guns and wheat? c) Assuming that b stands and if all the resources are used for the production of guns, 20 guns can be produced and if all the resources are used for production of wheat, 80 units of wheat can be produced, then what is the opportunity cost of producing one gun? 2. Draw separate diagrams for a, b and c. a) Lets consider the market for street food which is an inferior good. Show using demand and supply curves what will happen to the equilibrium price and quantity of street food if people's income decreases. b) Lets consider the market for mobile phones. Show using demand supply curves what will happen to the equilibrium price and quantity of mobile phones if there is a technological advancement in the mobile phone manufacturing industry. c) Lets consider the market for fuel. Show using demand supply curves what will happen to the equilibrium price and quantity of fuel if price of cars fall