Economic Question

Using diagrams, the likely effect on the market for traditional butcher services, (10 marks),Draw a diagram that shows the main macroeconomic flows in the economy. Identify all components of the diagram. (10 marks),The weekly demand and supply schedules for t-shirts (in millions) in a free market are as follows:

• What is the equilibrium price and quantity? (5 marks)
• Assume that changes in fashion cause the demand for tshirts to rise by 4 million at each price. What will be the new equilibrium price and quantity? (5 marks)
• Why does the equilibrium quantity increase differ from the increase in demand? (10 marks)
• Now plot the data in the table on a graph and show the equilibrium. Also plot the new data corresponding to your answer in part (b). (10 marks)
• Referring to the original data, what is the price elasticity of demand between a price of £7 and a price of£5? Is it elastic or inelastic? (10 marks)