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QUESTION 2 Do you agree with the following comment, "Firms are to continue production despite making economic loss in the short run" Justify using diagram(s) in your explanation? 3 Marks Define game theory and apply the game theory matrix diagram to illustrate and explain a strategic decision YOU made recently. 3 Marks QUESTION 3 Why is it that in some countries even as real per capita gross domestic product increases, the welfare of many people does not improve? Explain by providing four (4) reasons. 2 Marks Economist are predicting that stagflation could become an issue. Graphically represent and explain how stagflation can occur and highlight two main economic problems of stagflation. 3 Marks It is reported that the consumer price index has increased by 7.3 %. Does this mean that the cost of living of every Australian has increased by 7.3 %? Explain. 3 Marks Explain how changes in participation rate can impact the unemployment rate. 2 Marks