usepackage{TikZ } for economists

Kevin Goulding May 2011

P

q Supply Supply Shift

1 P (q) = 2 q + 5.25 Pc 1 P (q) = 2 q + 9 2

pe p p

B C

T S q qe q
Abstract This is a short guide on how to use the LaTeX package TikZ to quickly create some frequently used diagrams common to an undergraduate microeconomics class. Any comments or questions can be e-mailed directly to [email protected] with subject heading TikZ for economists.

Introduction
TikZ is a package that is useful for creating graphics by via coding direclty in your LaTek document. For example, rather than generating a graphic le (.pdf, .jpg, etc.) and linking to it in your LaTeX code, you include TikZ code in your LaTeX document that tells your compiler how to draw. There are several advantages to using TikZ code: 1. Less complicated le structure - all your gures are self-contained within your LaTeX document. 2. Beautiful results, with no loss of resolution when scaled up or down. 3. The ability to change diagrams by referencing variables within TikZ code.

Header
At the very top of you LaTeX document, always include:
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\ usepackage { t i k z }

And, when you would like to begin a new TikZ diagram within your document, start (and nish it) with this code:
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\ begin { t i k z p i c t u r e } % e n t e r TikZ code h e r e . \end{ t i k z p i c t u r e }

A simple example
In this section, we will walk through the creation of the picture in Figure 1 at a high level, just to let you know in broad terms what is going on in the code shown below. Starting the Figure The rst line of code (3) tells LaTeX to interpret the following code using the TikZ compiler. Here you also specify the scale of your image. This image has a scale value of 1.1, representing a 10% size increase over no scaling. Line 4 invokes a TikZ packages that allows you to calculate relative coordinate positions (see line 15 for an example of this).

Dening Coordinates Lines 7-11 dene the coordinates we will be using in this image as well as the specic labels we would like to place next to the coordinates. For example, line 8 says to dene a coordinate A located at the cartesian coordinates (-2.5,2.5) and label the coordinate with a letter A above the coordinate. Later in the code we will be able to reference this coordinate simply as A. Notice that all the coordinate labels are surrounded by $, thus invoking LaTeXs math-mode. All code in math-mode (from the amsmath package) works here for labelling. Figure 1: A two-node network electricity A GA cheap
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B K GB dear

TikZ code : F i g u r e 1 : A twonode network

\ b e g i n { t i k z p i c t u r e } [ s c a l e =1.1 , t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l o w s c o o r d i n a t e c a l c u l a t i o n s . % Define coordinates . \ coordinate [ l a b e l= \ coordinate [ l a b e l= \ coordinate [ l a b e l= \ coordinate [ l a b e l= \ coordinate [ l a b e l=

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above : $A$ ] (A) a t ( 2 . 5 , 2 . 5 ) ; above : $B$ ] (B) a t ( 2 . 5 , 2 . 5 ) ; above : $ e l e c t r i c i t y $ ] (C) a t ( 0 , 3 . 2 5 ) ; above : $G A \Rightarrow cheap $ ] (D) a t ( 3 , 1 . 5 ) ; above : $G B \Rightarrow d e a r $ ] (E) a t ( 3 , 1 . 5 ) ;

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% Draw l i n e s and arrows . \draw (A) (B) ; \draw[>] ( $ (A) + ( 1 , 0 . 7 5 ) $ ) ( $ (B) +( 1 ,0.75) $ ) ; \draw [ d e n s e l y d o t t e d ] ( 0 , 2 . 8 ) ( 0 , 2 . 2 ) node [ below ] {$K$ } ; \draw [ d e n s e l y d o t t e d ] ( 0 . 0 5 , 2 . 8 ) ( 0 . 0 5 , 2 . 2 ) ; % Color i n c o o r d i n a t e s . \ f i l l [ p u r p l e ] (A) c i r c l e ( 3 pt ) ; \ f i l l [ p u r p l e ] (B) c i r c l e ( 3 pt ) ; \end{ t i k z p i c t u r e }

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Drawing lines and arrows Lines 14-17 essentially connects the coordinates with lines. Line 14 draws a line from coordinate A to coordinate B (as dened above). Line 15 calculates two new coordinates relative to coordinates 3

A and B, and connects them with an arrowed line by using the command []. The ability to calculate new coordinates in positions relative to other coordinates is a handy feature available in TikZ. For example, line 15 draws an (arrowed) line from a coordinate 1 unit to the right of coordinate A and 0.75 units above coordinate A to a new coordinate one unit to the left of coordinate B and 0.75 units above. Notice that these relative coordinate calculations need to be enclosed in $. Lines 16 and 17 draw the small vertical lines above K in the diagram. Calling densely dotted changes the look of the line. Other types of lines are dotted, dashed, thick and several others. Because we called thick in line 4 of code, all these lines are a bit thicker than if we had not called the command. You can delete the option thick and do a visual comparison. Coloring Coordinates Lines 20 & 21 add the little note of color that you see in our diagram the nodes in our network (coordinates A and B) are both small circles lled in with the color purple. This is accomplished with the le command. Note that colors other than purple can be invoked; feel free to try any of the usual colors (e.g. green, blue, orange, etc.). The command circle draws a circle around coordinate A or B, and (3pt) determines the size of the circle.

A Few Things to Notice

TikZ code diers from LaTeX code in several ways: 1. In TikZ, each line must end in a semicolon. 2. Locations are specied via Cartesian Coordinates. Where is the origin? The origin is horizontally centered on the page, but its vertical placement depends on the size of the entire picture. Ideally, the simple example shown above will give you an idea of how far a one-unit change represents. For example, the horizontal distance between node A and node B in Figure 1 is 5 units. 3. Similar to LaTeX code, most functions begin with a backward slash.

Dening Parameters
TikZ allows you to dene parameter values and subsequently reference those values throughout your image (or the entire LaTeX) document. This feature enables you to update images quicker once youve set up your images as manipulations of parameters. The following is the TikZ code to dene a parameter inc and set its value to 50.
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\ def \ i n c {50}

You will now be able to reference inc elsewhere in your gure. For example, the following code denes two parameters, then uses those parameter values to dene a coordinate. In this case, x2 will be located at (0, inc ). pb
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%D e f i n e p a r a m e t e r s \ def \ i n c {50} % parameter i n c s e t = 50 \ def \pa { 1 9 . 5 } % parameter pa s e t = 1 9 . 5 % Define coordinates . \ coordinate ( x 2 ) a t ( 0 , { \ i n c /\pb } ) ;

Plotting functions
TikZ allows you to plot functions. For example, see the following code.
\draw [ domain = 0 . 6 : 6 ] p l o t ( \ x , { 1 0 exp (1\x 0.2) +0.3}) ;

The code above plots the following function: f (x) = 10ex0.2 + 0.3 where x [0.6, 6]

For the most part, functions can be specied using intuitive notation. For best results, install gnuplot on your computer, and you can access a larger set of functions. See http://www.texample.net/tikz/examples/tag/gnuplot/ for more of the capabilities of TikZ coupled with gnuplot. The following example adds axes and a grid using the grid specication with the draw function. f (x) f (x) = 0.5x

\ b e g i n { t i k z p i c t u r e } [ domain = 0 : 4 ] % Draw g r i d l i n e s . \draw [ v e r y t h i n , c o l o r=gray ] ( 0.1 , 1.1) g r i d ( 3 . 9 , 3 . 9 ) ; % Draw x and f ( x ) a x e s . \draw[>] ( 0 . 2 , 0 ) ( 4 . 2 , 0 ) node [ r i g h t ] {$ x $ } ; \draw[>] ( 0 , 1 . 2 ) ( 0 , 4 . 2 ) node [ above ] {$ f ( x ) $ } ; % P l o t l i n e w i t h s l o p e = 1/2 , i n t e r c e p t = 1 . 5 \draw [ c o l o r=b l u e ] p l o t ( \ x , { 1 . 5 + 0 . 5 \ x } ) node [ r i g h t ] {$ f ( x ) = 0 . 5 x $ } ; \end{ t i k z p i c t u r e }

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Coloring Area
TikZ is capable of shading in areas of your diagram, bounded by coordinate or functions. This can be achieved by calling the ll function as in the following example:
\ f i l l [ o r a n g e ! 6 0 ] ( 0 , 0 ) ( 0 , 1 ) ( 1 , 1 ) ( 1 , 0 ) c y c l e ;

This colors in a 1x1 square with orange (at 60% opacity). Basically, it will connect the listed coordinates with straight lines creating an outline that will be shaded in by the chosen color. Note the command cycle at the end. This closes the loop by connecting the last listed coordinate back to the rst. You can also bound the area to be shaded by a non-straight line. The following example shades in the area under a normal distribution bounded by 0 and 4.4:
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% d e f i n e normal d i s t r i b u t i o n f u n c t i o n normaltwo \ def \ normaltwo {\x , { 4 1 / exp ( ( ( \ x3) 2 ) / 2 ) }}

% Shade orange are a u n d e r n e a t h c u r v e . \ f i l l [ f i l l =o r a n g e ! 6 0 ] ( 2 . 6 , 0 ) p l o t [ domain = 0 : 4 . 4 ] ( \ normaltwo ) ( 4 . 4 , 0 ) cycle ; % Draw and l a b e l normal d i s t r i b u t i o n f u n c t i o n \draw [ dashed , c o l o r=blue , domain = 0 : 6 ] p l o t ( \ normaltwo ) node [ r i g h t ] {$N( \mu, \ sigma 2 ) $};

N (, 2 ) And, here is another example that includes axes and two interior bounds on the shading:
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\ begin { t i k z p i c t u r e } % d e f i n e normal d i s t r i b u t i o n f u n c t i o n normaltwo \ def \ normaltwo {\x , { 4 1 / exp ( ( ( \ x3) 2 ) / 2 ) }} % i n p u t x and y p a r a m e t e r s \ def \y { 4 . 4 } \ def \x { 3 . 4 } % this line calculates f (y) \ def \ f y {41/ exp ( ( ( \ y3) 2 ) / 2 ) } \ def \ f x {41/ exp ( ( ( \ x3) 2 ) / 2 ) } % Shade orange are a u n d e r n e a t h c u r v e . \ f i l l [ f i l l =o r a n g e ! 6 0 ] ( { \ x } , 0 ) p l o t [ domain={\x } : { \ y } ] ( \ normaltwo ) ( { \ y } , 0 ) c y c l e ; % Draw and l a b e l normal d i s t r i b u t i o n f u n c t i o n \draw [ c o l o r=blue , domain = 0 : 6 ] p l o t ( \ normaltwo ) node [ r i g h t ] { } ; % Add dashed l i n e d r o p p i n g down from normal . \draw [ dashed ] ( { \ y } , { \ f y } ) ( { \ y } , 0 ) node [ below ] {$ y $ } ; \draw [ dashed ] ( { \ x } , { \ f x } ) ( { \ x } , 0 ) node [ below ] {$ x $ } ; % O p t i o n a l : Add a x i s l a b e l s \draw ( . 2 , 2 . 5 ) node [ l e f t ] {$ f Y( u ) $ } ; \draw ( 3 , . 5 ) node [ below ] {$u $ } ; % O p t i o n a l : Add a x e s \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] { } ; \draw[>] ( 0 , 0 ) ( 0 , 5 ) node [ above ] { } ; \end{ t i k z p i c t u r e }

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fY (u)

x u

Some TikZ diagrams with code

The following diagrams were done in TikZ.

Budget Constraints and Indierence Curves

Figure 2: A Generic Price Change x2
M p2

IC2 IC1 x1
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TikZ code : F i g u r e 2 : A Generic P r i c e Change

\ b e g i n { t i k z p i c t u r e } [ domain =0:5 , r a n g e =4:5 , s c a l e =1, t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand

\ def \ i n c {50} %Enter t o t a l income \ def \pa { 1 9 . 5 } %P r i c e o f x 1 \ def \pb {10} %P r i c e o f x 2 . \ def \panew { 1 0 . 6 } \ def \ i c a {\x , { 1 0 / \ x }} \ def \ i c b {\x , { \ s s l p \ x+\ s i n t }} \ def \demandtwo {\x , { \ d s l p \ x+\d i n t+\dsh }} \ def \ supplytwo {\x , { \ s s l p \ x+\ s i n t +\s s h }}

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% Define coordinates . \ coordinate ( x 2 ) a t ( 0 , { \ i n c /\pb } ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ pa } , 0 ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ panew } , 0 ) ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$ x 1 $ } ; \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ above ] {$ x 2 $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) node [ l e f t ] {$\ f r a c {M}{p 2 } $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) ; \draw [ t h i c k , c o l o r=p u r p l e , domain = 0 . 6 : 6 ] p l o t ( \ x , { 1 0 exp (1\x 0.2) +0.3}) node [ r i g h t ] {IC $ 1 $ } ; \draw [ t h i c k , c o l o r=p u r p l e , domain = 1 : 6 ] p l o t ( \ x , { 1 0 exp ( 0.8\ x ) +1}) node [ r i g h t ] {IC $ 2 $ } ; \draw [ d o t t e d ] ( 1 . 5 , 2 ) ( 1 . 5 , 0 ) ; \draw [ d o t t e d ] ( 2 . 5 , 2 . 3 5 ) ( 2 . 5 , 0 ) ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e 3 : A Budget c o n s t r a i n t t h a t has a voucher f o r x 1 \ b e g i n { t i k z p i c t u r e } [ domain =0:5 , r a n g e =4:5 , s c a l e =1, t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ i n c {62} %Enter t o t a l income \ def \pa { 1 9 . 5 } %P r i c e o f x 1 \ def \pb {10} %P r i c e o f x 2 . \ def \panew { 1 0 . 6 } \ def \ i c a {\x , { 2 / \ x20}} \ def \ i c b {\x , { \ s s l p \ x+\ s i n t }} \ def \ bcv {\x ,{( \ pa ) / ( \ pb ) \ x+(\ i n c ) / ( \ pb ) }}

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Figure 3: A Budget constraint that has a voucher for x1 x2

voucher

Indi. Curve Budget Constraint

\ def \ bcx {\x , { ( 5 ) /\ x }}
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x1

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% Define coordinates . \ coordinate ( x 2 ) a t ( 0 , { \ i n c /\pb } ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ pa } , 0 ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ panew } , 0 ) ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$ x 1 $ } ; \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ above ] {$ x 2 $ } ; \draw [ dashed ] ( 1 . 2 , 3 . 9 ) ( 0 , 3 . 9 ) node [ l e f t ] { voucher } ; \draw [ t h i c k , domain = 1 . 2 : \ i n c /\ pa ] p l o t ( \ bcv ) node [ below ] { Budget C o n s t r a i n t } ; \draw [ t h i c k , c o l o r=p u r p l e , domain = 1 : 5 ] p l o t ( \ bcx ) node [ below ] { I n d i f f . Curve } ; \end{ t i k z p i c t u r e }

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Income & Substitution Eects

Figure 4: A decrease in the price of x1 by one-fourth
x2 BC2
M p2

BC1 e 1 e1 IC1 x1 Substitution Eect Total Eect Income Eect e 2 IC2

% onef o u r t h

TikZ code : F i g u r e 4 : A d e c r e a s e i n t h e p r i c e o f x 1 by

\ b e g i n { t i k z p i c t u r e } [ domain =0:100 , r a n g e =0:200 , s c a l e =0.4 , t h i c k , f o n t =\ s c r i p t s i z e ] \ u s e t i k z l i b r a r y { c a l c } %a l l %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ i n c {10} %Enter t o t a l income \ def \pa {1} %P r i c e o f x 1 \ def \pb {1} %P r i c e o f x 2 . \ def \panew { 0 . 2 5 } %\ d e f \ i c a {\ x , { 1 0 / \ x }} %\ d e f \ i c b {\ x , { \ s s l p \ x+\ s i n t }} %\ d e f \ demandtwo {\ x , { \ d s l p \ x+\ d i n t +\dsh }} %\ d e f \ s u p p l y t w o {\ x , { \ s s l p \ x+\ s i n t +\s s h }}

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% Define coordinates . \ coordinate ( x 2 ) a t ( 0 , { \ i n c /\pb } ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ pa } , 0 ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ panew } , 0 ) ; \ coordinate [ l a b e l= r i g h t : $ e 1 $ ] ( p 1 ) a t ( 5 , 5 ) ; \ coordinate [ l a b e l= above : $ e 1 $ ] ( p 2 ) a t ( 1 0 , 2 . 5 ) ; \ coordinate [ l a b e l= above : $ e 2 $ ] ( p 3 ) a t ( 2 0 , 5 ) ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s .

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\draw[>] ( 0 , 0 ) ( 4 2 , 0 ) node [ r i g h t ] {$ x 1 $ } ; \draw[>] ( 0 , 0 ) ( 0 , 1 2 ) node [ above ] {$ x 2 $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) node [ l e f t ] {$\ f r a c {M}{p 2 } $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) ; % \ draw [ t h i c k , c o l o r=p u r p l e , domain = 0 . 6 : 1 0 0 ] p l o t (\ x , { 1 5 exp (\ x ) }) node [ r i g h t ] {IC $ 1 $ } ; %\ draw [ t h i c k , c o l o r=p u r p l e , domain = 0 . 6 : 1 0 0 ] p l o t f u n c t i o n (\ x , { ( 2 5 0 0 ) /(\ x ) }) node [ r i g h t ] {IC $ 1 $ } ; \draw [ t h i c k , c o l o r=green , domain = 2 : 2 5 ] p l o t ( \ x , { ( 2 5 ) / ( \ x ) } ) node [ r i g h t ] {IC $ 1$}; \draw [ t h i c k , c o l o r=green , domain = 8 : 3 0 ] p l o t ( \ x , { ( 1 0 0 ) / ( \ x ) } ) node [ r i g h t ] {IC $ 2$}; \draw ( 2 , 8 ) node [ l a b e l= below : $BC 1 $ ] { } ; \draw ( 5 , 1 1 . 5 ) node [ l a b e l= below : $BC 2 $ ] { } ; \draw [ d o t t e d ] ( p 2 ) ( 1 0 , 0 ) ; \draw [ d o t t e d ] ( p 1 ) ( 5 , 0 ) ; \draw [ d o t t e d ] ( p 3 ) ( 2 0 , 0 ) ; \draw [ dashed ] ( 0 , 5 ) ( 2 0 , 0 ) ;

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\draw[<] ( 9 . 8 , 1 ) (5 , 1) node [ l e f t ] { S u b s t i t u t i o n E f f e c t } ; \draw[>] (10 , 1) (20 , 1) node [ r i g h t ] { Income E f f e c t } ; \draw[>, d e n s e l y dashed ] (5 , 2) (20 , 2) ; \draw ( 1 2 . 5 , 2 ) node [ l a b e l= below : T o t a l E f f e c t ] { } ; \ f i l l [ b l u e ] ( p 1 ) c i r c l e ( 6 pt ) ; \ f i l l [ b l u e ] ( p 2 ) c i r c l e ( 6 pt ) ; \ f i l l [ b l u e ] ( p 3 ) c i r c l e ( 6 pt ) ; \end{ t i k z p i c t u r e }

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% half .

TikZ code : F i g u r e 5 : A d e c r e a s e i n t h e p r i c e o f x 1 by

\ b e g i n { t i k z p i c t u r e } [ domain =0:100 , r a n g e =0:200 , s c a l e =0.7 , t h i c k ] \ usetikzlibrary { calc } %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ i n c {10} %Enter t o t a l income \ def \pa {1} %P r i c e o f x 1 \ def \pb {1} %P r i c e o f x 2 . \ def \panew { 0 . 5 } %New p r i c e f o r x 1 . % Define coordinates . \ coordinate ( x 2 ) a t ( 0 , { \ i n c /\pb } ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ pa } , 0 ) ; \ coordinate ( x 1 ) a t ( { \ i n c /\ panew } , 0 ) ;

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Figure 5: A decrease in the price of x1 by half. x2

M p2

BC2 BC1 e 1 e1 IC2 IC1 x1 Substitution Eect Total Eect Income Eect e 2

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\ coordinate [ l a b e l= r i g h t : $ e 1 $ ] ( p 1 ) a t ( 5 , 5 ) ; \ coordinate [ l a b e l= above : $ e 1 $ ] ( p 2 ) a t ( 7 . 0 7 , 3 . 5 3 ) ; \ coordinate [ l a b e l= above : $ e 2 $ ] ( p 3 ) a t ( 1 0 , 5 ) ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 2 0 . 5 , 0 ) node [ r i g h t ] {$ x 1 $ } ; \draw[>] ( 0 , 0 ) ( 0 , 1 2 ) node [ above ] {$ x 2 $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) node [ l e f t ] {$\ f r a c {M}{p 2 } $ } ; \draw [ t h i c k ] ( x 1 ) ( x 2 ) ; %Draw i n d i f f e r e n c e c u r v e s \draw [ t h i c k , c o l o r=green , domain = 2 : 1 8 ] p l o t ( \ x , { ( 2 5 ) / ( \ x ) } ) node [ r i g h t ] {IC $ 1$}; \draw [ t h i c k , c o l o r=green , domain = 3 . 9 : 1 8 ] p l o t ( \ x , { ( 5 0 ) / ( \ x ) } ) node [ r i g h t ] {IC $ 2$}; %L a b e l b u d g e t c o n s t r a i n t \draw ( 2 , 7 . 8 ) node [ l a b e l= below : $BC 1 $ ] { } ; \draw ( 4 . 5 , 9 . 1 ) node [ l a b e l= below : $BC 2 $ ] { } ;

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%Draw d o t t e d l i n e s \draw [ d o t t e d ] \draw [ d o t t e d ] \draw [ d o t t e d ]

showing ( p 2 ) ( p 1 ) ( p 3 )

quantities . (7.07 ,0) ; (5 ,0) ; (10 ,0) ;

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%L a b e l S u b s t i t u t i o n , Income , and T o t a l e f f e c t s . \draw [ dashed ] ( 0 , 7 . 0 7 ) ( 1 4 . 1 4 , 0 ) ; \draw[<] (7 , 1) (5 , 1) node [ l e f t ] { S u b s t i t u t i o n E f f e c t } ; \draw[>] ( 7 . 0 7 , 1 ) (10 , 1) node [ r i g h t ] { Income E f f e c t } ; \draw[>, d e n s e l y dashed ] (5 , 2) (10 , 2) ; \draw ( 7 . 5 , 2 ) node [ l a b e l= below : T o t a l E f f e c t ] { } ; %C r e a t e p o i n t s where IC t a n g e n t i a l l y i n t e r s e c t s t h e b u d g e t c o n s t r a i n t . \ f i l l [ b l u e ] ( p 1 ) c i r c l e ( 4 pt ) ; \ f i l l [ b l u e ] ( p 2 ) c i r c l e ( 4 pt ) ; \ f i l l [ b l u e ] ( p 3 ) c i r c l e ( 4 pt ) ; \ f i l l [ b l u e ] ( 7 . 0 7 , 3 . 5 3 ) c i r c l e ( 4 pt ) ; \end{ t i k z p i c t u r e } %

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TikZ code : F i g u r e XX: A twonode network

Some Useful Diagrams

Figure 6: A piecewise-dened electricity bid
$ MW

MW
%
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TikZ code : F i g u r e 6 : A p i e c e w i s e d e f i n e d e l e c t r i c i t y b i d

\ b e g i n { t i k z p i c t u r e } [ domain =0:5 , s c a l e =1, t h i c k ]

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%D e f i n e b i d q u a n t i t i e s \ def \ qone {3} % step 1 \ def \ qtwo {2} % step 2 \ def \ q t h r e e {1} % step 3 \ def \ q f o u r { 0 . 5 } % step 4 %D e f i n e b i d p r i c e s \ def \ pone {1} % step 1 \ def \ptwo {2} % step 2 \ def \ p t h r e e {4} % step 3 \ def \ p f o u r { 5 . 5 } % step 4

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% Define coordinates . \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate \ coordinate ( l o n e ) a t ( 0 , { \ pone } ) ; ( l t w o ) a t ( { \ qone } , { \ ptwo } ) ; ( l t h r e e ) a t ( { \ qtwo+\qone } , { \ p t h r e e } ) ; ( l f o u r ) a t ( { \ q t h r e e+\qtwo+\qone } , { \ p f o u r } ) ; ( r o n e ) a t ( { \ qone } , { \ pone } ) ; ( rtwo ) a t ( { \ qtwo+\qone } , { \ ptwo } ) ; ( r t h r e e ) a t ( { \ q t h r e e+\qtwo+\qone } , { \ p t h r e e } ) ; ( r f o u r ) a t ( { \ q f o u r+\q t h r e e+\qtwo+\qone } , { \ p f o u r } ) ; ( done ) a t ( { \ qone } , 0 ) ; ( dtwo ) a t ( { \ qtwo+\qone } , 0 ) ; ( d t h r e e ) a t ( { \ q t h r e e+\qtwo+\qone } , 0 ) ; ( d f o u r ) a t ( { \ q f o u r+\q t h r e e+\qtwo+\qone } , 0 ) ;

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%Draw a x e s \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$M } ; W$ \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ l e f t ] {$\ f r a c {\$}{M $ } ; W} %Draw b i d s t e p s \draw [ t h i c k \draw [ t h i c k \draw [ t h i c k \draw [ t h i c k

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, , , ,

c o l o r=b l u e ] c o l o r=b l u e ] c o l o r=b l u e ] c o l o r=b l u e ]

( l o n e ) ( r o n e ) ; ( l t w o ) ( rtwo ) ; ( l t h r e e ) ( r t h r e e ) ; ( l f o u r ) ( r f o u r ) ;

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%Draw dashed l i n e s \draw [ dashed ] ( l t w o ) ( r o n e ) ; \draw [ dashed ] ( l t h r e e ) ( rtwo ) ; \draw [ dashed ] ( l f o u r ) ( r t h r e e ) ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e 7 : The area b e t w e e n two c u r v e s

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Figure 7: The area between two curves f () x

2 2 64th

1 x

\ b e g i n { t i k z p i c t u r e } [ s c a l e =2] %f o n t =\ s c r i p t s i z e ] %Note : 64 t h p e r c e n t i l e i s 0 . 3 6 s t a n d a r d d e v i a t i o n s t o t h e r i g h t o f mean . %D e f i n e e q u a t i o n s f o r t h e two normal d i s t r i b u t i o n s . \ def \ normalone {\x , { 4 1 / exp ( ( ( \ x4) 2 ) / 2 ) }} \ def \ normaltwo {\x , { 4 1 / exp ( ( ( \ x3) 2 ) / 2 ) }} %Shade orange are a \ f i l l [ f i l l =o r a n g e ! 6 0 ] ( 2 . 6 , 0 ) p l o t [ domain = 2 . 6 : 3 . 4 ] ( \ normaltwo ) ( 3 . 4 , 0 ) c y c l e ; \ f i l l [ f i l l =w h i t e ] ( 2 . 6 , 0 ) p l o t [ domain = 2 . 6 : 3 . 4 ] ( \ normalone ) ( 3 . 4 , 0 ) cycle ; %Draw b l u e normal d i s t r i b u t i o n s

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\draw [ t h i c k , c o l o r=blue , domain = 0 : 6 ] p l o t ( \ normalone ) node [ r i g h t ] {$\lambda 1 $ } ; \draw [ t h i c k , c o l o r=blue , domain = 0 : 5 ] p l o t ( \ normaltwo ) node [ r i g h t ] {$\lambda 2 $ } ; %Draw a x e s \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$\ hat{x } $ } ; \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ l e f t ] {$ f ( \ hat{x } ) $ } ; %D e f i n e c o o r d i n a t e s \ coordinate ( muone ) a t \ coordinate ( mutwo ) a t

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(4 ,4) ; (3 ,4) ;

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%Draw dashed l i n e s from mean t o xa x i s \draw [ dashed ] ( muone ) ( 4 , 0 ) node [ below ] {$64{ th } $ } ; \draw [ dashed ] ( mutwo ) ( 3 , 0 ) node [ below ] {$\mu 2 $ } ; \draw [ dashed ] ( 2 . 6 , 0 ) p l o t [ domain = 2 . 5 9 : 2 . 6 ] ( \ normaltwo ) node [ l e f t ] {$\phi $}; \draw [ dashed ] ( 3 . 4 , 0 ) p l o t [ domain = 3 . 3 9 : 3 . 4 ] ( \ normaltwo ) node [ above ] {$+\phi $};

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\end{ t i k z p i c t u r e }

Game Theory Diagrams

See below, customizable diagrams for mapping strategic games. Figure 8: A 22 Strategic form game Firm B Right Left 57 Top 57 Firm A 72 Bot 54 64 64 72 54

TikZ code : F i g u r e 8 : A 2 x 2 S t r a t e g i c form game

\ b e g i n { t i k z p i c t u r e } [ s c a l e =2] %f o n t =\ s c r i p t s i z e ]

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% O u t l i n e box \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ]

( 0 , 0 ) ( 2 . 2 , 0 ) ; ( 0 , 0 ) ( 0 , 2 . 2 ) ; ( 2 . 2 , 2 . 2 ) ( 2 . 2 , 0 ) ; ( 2 . 2 , 2 . 2 ) ( 0 , 2 . 2 ) ; ( 0 . 3 , 1 . 1 ) ( 2 . 2 , 1 . 1 ) ; ( 1 . 1 , 0 ) ( 1 . 1 , 2 . 5 ) ;

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% Payoff d i v i d e r s \draw [ d e n s e l y d o t t e d ] \draw [ d e n s e l y d o t t e d ] \draw [ d e n s e l y d o t t e d ] \draw [ d e n s e l y d o t t e d ]

( . 1 , 2 . 1 ) ( 1 , 1 . 2 ) ; ( . 1 , 1 ) ( 1 , 0 . 1 ) ; ( 1 . 2 , 1 ) ( 2 . 1 , 0 . 1 ) ; ( 1 . 2 , 2 . 1 ) ( 2 . 1 , 1 . 2 ) ;

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% Strategy lab el s \ coordinate [ l a b e l= l e f t : Top ] ( p 1 ) a t \ coordinate [ l a b e l= l e f t : Bot ] ( p 1 ) a t

( 0.1 ,1.6) ; ( 0.1 ,0.4) ;

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\ coordinate [ l a b e l= above : L e f t ] ( p 1 ) a t ( 0 . 5 5 , 2 . 2 ) ; \ coordinate [ l a b e l= above : Right ] ( p 1 ) a t ( 1 . 6 5 , 2 . 2 ) ; \ coordinate [ l a b e l= above : \ bf {Firm B} ] ( p 1 ) a t ( 1 . 1 , 2 . 5 ) ; \ coordinate [ l a b e l= l e f t : \ bf {Firm A} ] ( p 1 ) a t ( 0 . 3 , 1 . 1 ) ; % The p a y o f f s f o r b o t h p l a y e r s : \ f i l l [ red ] ( . 3 5 , 1 . 4 ) node { $ 5 7 $ } ; \ f i l l [ blue ] ( 0 . 8 , 1 . 9 ) node { $ 5 7 $ } ; \ f i l l [ red ] ( 1 . 4 , 1 . 4 ) node { $ 7 2 $ } ; \ f i l l [ blue ] ( 1 . 9 , 1 . 9 ) node { $ 5 4 $ } ; \ f i l l [ red ] ( 0 . 3 5 , 0 . 3 5 ) node { $ 5 4 $ } ; \ f i l l [ blue ] ( 0 . 8 , 0 . 8 ) node { $ 7 2 $ } ; \ f i l l [ red ] ( 1 . 4 , 0 . 3 5 ) node { $ 6 4 $ } ; \ f i l l [ blue ] ( 1 . 9 , 0 . 8 ) node { $ 6 4 $ } ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e XX: A 3 x 3 S t r a t e g i c form game

\ b e g i n { t i k z p i c t u r e } [ s c a l e =2]
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% Outline matrix \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ]

( 0 , 0 ) ( 0 , 0 ) (3.3 ,3.3) (3.3 ,3.3)

(3.3 ,0) ; (0 ,3.3) ; ( 3 . 3 , 0 ) ; ( 0 , 3 . 3 ) ;

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Figure 9: A 33 Strategic form game Firm B Left 64 Top 64 57 Firm A Mid 57 72 Bot 54 64 64 72 64 64 64 64 54 Middle 64 64 64 Right 64

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\draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ t h i c k ] \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y \draw [ d e n s e l y

( 0.3 ,1.1) ( 0.3 ,2.2) ( 1 . 1 , 0 ) ( 2 . 2 , 0 )

( 3 . 3 , 1 . 1 ) ; ( 3 . 3 , 2 . 2 ) ; (1.1 ,3.6) ; (2.2 ,3.6) ;

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dotted ] dotted ] dotted ] dotted ] dotted ] dotted ] dotted ] dotted ] dotted ]

( . 1 , 2 . 1 ) ( 1 , 1 . 2 ) ; ( . 1 , 1 ) ( 1 , 0 . 1 ) ; ( 1 . 2 , 1 ) ( 2 . 1 , 0 . 1 ) ; ( 1 . 2 , 2 . 1 ) ( 2 . 1 , 1 . 2 ) ; ( . 1 , 3 . 2 ) ( 1 , 2 . 3 ) ; ( 1 . 2 , 3 . 2 ) ( 2 . 1 , 2 . 3 ) ; ( 3 . 2 , . 1 ) ( 2 . 3 , 1 ) ; ( 3 . 2 , 1 . 2 ) ( 2 . 3 , 2 . 1 ) ; ( 3 . 2 , 2 . 3 ) ( 2 . 3 , 3 . 2 ) ;

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\ coordinate [ l a b e l= r i g h t : Top ] ( p 1 ) a t \ coordinate [ l a b e l= r i g h t : Mid ] ( p 1 ) a t \ coordinate [ l a b e l= r i g h t : Bot ] ( p 1 ) a t

( 0.5 ,2.7) ; ( 0.5 ,1.65) ; ( 0.5 ,0.55) ;

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\ coordinate [ l a b e l= above : L e f t ] ( p 1 ) a t ( 0 . 5 5 , 3 . 3 ) ; \ coordinate [ l a b e l= above : Middle ] ( p 1 ) a t ( 1 . 6 5 , 3 . 3 ) ; \ coordinate [ l a b e l= above : Right ] ( p 1 ) a t ( 2 . 7 , 3 . 3 ) ; \ coordinate [ l a b e l= above : \ bf {Firm B} ] ( p 1 ) a t ( 1 . 6 5 , 3 . 7 ) ; \ coordinate [ l a b e l= l e f t : \ bf {Firm A} ] ( p 1 ) a t ( . 8 , 1 . 6 5 ) ;

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% F i l l i n payo f f s \ f i l l [ red ] ( . 3 5 , 1 . 4 ) node { $ 5 7 $ } ; %Mid L e f t \ f i l l [ blue ] ( 0 . 8 , 1 . 9 ) node { $ 5 7 $ } ; \ f i l l [ red ] ( 1 . 4 , 1 . 4 ) node { $ 7 2 $ } ; %Mid Middle \ f i l l [ blue ] ( 1 . 9 , 1 . 9 ) node { $ 5 4 $ } ; \ f i l l [ red ] ( 0 . 3 5 , 0 . 3 5 ) node { $ 5 4 $ } ; \ f i l l [ blue ] ( 0 . 8 , 0 . 8 ) node { $ 7 2 $ } ; %Bot L e f t

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\ f i l l [ red ] ( 1 . 4 , 0 . 3 5 ) node { $ 6 4 $ } ; %Bot Middle \ f i l l [ blue ] ( 1 . 9 , 0 . 8 ) node { $ 6 4 $ } ; \ f i l l [ red ] ( 2 . 5 , 0 . 3 5 ) node { $ 6 4 $ } ; %Bot R i g h t \ f i l l [ blue ] ( 3 , 0 . 8 ) node { $ 6 4 $ } ; \ f i l l [ red ] ( 2 . 5 , 1 . 4 5 ) node { $ 6 4 $ } ; %Mid R i g h t \ f i l l [ blue ] ( 3 , 1 . 9 ) node { $ 6 4 $ } ; \ f i l l [ red ] ( 2 . 5 , 2 . 5 5 ) node { $ 6 4 $ } ; %Top R i g h t \ f i l l [ b l u e ] ( 3 , 3 ) node { $ 6 4 $ } ; \ f i l l [ red ] ( 1 . 4 , 2 . 5 5 ) node { $ 6 4 $ } ; %Top Middle \ f i l l [ blue ] ( 1 . 9 , 3 ) node { $ 6 4 $ } ; \ f i l l [ red ] ( 0 . 3 5 , 2 . 5 5 ) node { $ 6 4 $ } ; \ f i l l [ blue ] ( 0 . 8 , 3 ) node { $ 6 4 $ } ; \end{ t i k z p i c t u r e } %Top L e f t

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Figure 10: An Extensive-form game (57, 57) Lef t Firm B

p To
Firm A

R ig h

t
(72, 54)

Bo

tto m
Firm B

Lef t R ig h t

(54, 72)

(64, 64)

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TikZ code : F i g u r e 1 0 : An E x t e n s i v e form game

% Set the o v e r a l l layout of the t r e e \ t i k z s t y l e { l e v e l 1}=[ l e v e l d i s t a n c e =3.5cm , s i b l i n g d i s t a n c e =3.5cm ] \ t i k z s t y l e { l e v e l 2}=[ l e v e l d i s t a n c e =3.5cm , s i b l i n g d i s t a n c e =2cm ] % D e f i n e s t y l e s f o r b a g s and l e a f s \ t i k z s t y l e { bag } = [ t e x t width=4em , t e x t c e n t e r e d ] \ t i k z s t y l e { end } = [ c i r c l e , minimum width=3pt , f i l l , i n n e r s e p=0pt ]

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% The s l o p e d o p t i o n g i v e s r o t a t e d e d g e l a b e l s . P e r s o n a l l y % I f i n d s l o p e d l a b e l s a b i t d i f f i c u l t t o read . Remove t h e s l o p e d o p t i o n s % to get horizontal l a b e l s . \ b e g i n { t i k z p i c t u r e } [ grow=r i g h t , s l o p e d ] \ node [ bag ] {Firm A} child { node [ bag ] {Firm B} child { node [ end , l a b e l=r i g h t : { $ ( 6 4 , 6 4 ) $ } ] {} % e n t e r payo f f s f o r ( Bottom , R i g h t ) edge from p a r e n t node [ above ] {$ Right $} } child { node [ end , l a b e l=r i g h t : { $ ( 5 4 , 7 2 ) $ } ] {} % e n t e r payo f f s f o r ( Bottom , L e f t ) edge from p a r e n t node [ above ] {$ L e f t $} } edge from p a r e n t node [ above ] {$ Bottom $} } child { node [ bag ] {Firm B} child { node [ end , l a b e l=r i g h t : { $ ( 7 2 , 5 4 ) $ } ] {} % e n t e r payo f f s f o r ( Top , R i g h t ) edge from p a r e n t node [ above ] {$ Right $} } child { node [ end , l a b e l=r i g h t : { $ ( 5 7 , 5 7 ) $ } ] {} % e n t e r payo f f s f o r ( Top , L e f t ) edge from p a r e n t node [ above ] {$ L e f t $} } edge from p a r e n t node [ above ] {$Top$} };

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\draw [ r e d ] ( 3 . 5 , 0 ) e l l i p s e ( 1cm and 3cm) ;

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\end{ t i k z p i c t u r e }

Taxes, Price ceilings, and market equilibriums

Figure 11: An economics example from texample.com E

YO

A C B NX = x G /T D

% . com
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TikZ code : F i g u r e 1 1 : An economics example from t e x a m p l e

% > See TikZ code i n . t e x f i l e backup or on t e x a m p l e . com .

% approach

TikZ code : F i g u r e 1 2 : Market e q u i l i b r i u m an a l t e r n a t e

\ b e g i n { t i k z p i c t u r e } [ s c a l e =3] % Draw a x e s \draw [<>, t h i c k ] ( 0 , 2 ) node ( y a x i s ) [ above ] {$P$} | ( 3 , 0 ) node ( x a x i s ) [ r i g h t ] {$Q$ } ; % Draw two i n t e r s e c t i n g l i n e s \draw ( 0 , 0 ) coordinate ( a 1 ) ( 2 , 1 . 8 ) coordinate ( a 2 ) ; \draw ( 0 , 1 . 5 ) coordinate ( b 1 ) ( 2 . 5 , 0 ) coordinate ( b 2 ) ;

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Figure 12: Market equilibrium - an alternate approach P

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% C a l c u l a t e t h e i n t e r s e c t i o n o f t h e l i n e s a 1 a 2 and b 1 b 2 % and s t o r e t h e c o o r d i n a t e i n c . \ coordinate ( c ) a t ( i n t e r s e c t i o n o f a 1a 2 and b 1b 2 ) ; % Draw l i n e s i n d i c a t i n g i n t e r s e c t i o n w i t h y and x a x i s . Here we use % t h e p e r p e n d i c u l a r c o o r d i n a t e system \draw [ dashed ] ( y a x i s | c ) node [ l e f t ] {$p $} | ( x a x i s | c ) node [ below ] {$ q $ } ; % Draw a d o t t o i n d i c a t e i n t e r s e c t i o n p o i n t \ f i l l [ r e d ] ( c ) c i r c l e ( 1 pt ) ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e 1 3 : P r i c e e l a s t i c i t y o f demand

\ b e g i n { t i k z p i c t u r e } [ s c a l e =3] % Draw a x e s \draw [<>, t h i c k ] ( 0 , 2 ) node ( y a x i s ) [ above ] {$P$} | ( 3 , 0 ) node ( x a x i s ) [ r i g h t ] {$Q$ } ; % Draw two i n t e r s e c t i n g l i n e s \draw [ c o l o r=w h i t e ] ( 0 , 0 ) coordinate ( a 1 ) ( 2 , 2 ) coordinate ( a 2 ) ; \draw ( 0 , 1 . 5 ) coordinate ( b 1 ) ( 1 . 5 , 0 ) coordinate ( b 2 ) node [ below ] {$Demand $}; % C a l c u l a t e t h e i n t e r s e c t i o n o f t h e l i n e s a 1 a 2 and b 1 b 2 % and s t o r e t h e c o o r d i n a t e i n c .

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Figure 13: Price elasticity of demand P Unitary Elastic Elastic

Inelastic

Demand
\ coordinate ( c ) a t ( i n t e r s e c t i o n o f a 1a 2 and b 1b 2 ) ;
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% Draw a d o t t o i n d i c a t e i n t e r s e c t i o n p o i n t \ f i l l [ r e d ] ( c ) c i r c l e ( 1 pt ) ; \draw[>, dashed ] ( $ ( c ) + ( 0 , 0 . 1 5 ) $ ) ( $ ( c ) + ( . 7 , 0 . 8 5 ) $ ) ; \draw[>, dashed ] ( $ ( c ) + ( 0 . 1 5 , 0 ) $ ) ( $ ( c ) + ( . 8 5 , 0 . 7 ) $ ) ; \ f i l l [ blue ] \ f i l l [ blue ] ( 0 . 5 , 1 . 5 ) node { E l a s t i c } ; ( 1 . 6 , 0 . 5 ) node { I n e l a s t i c } ;

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\draw[>] ( 1 . 5 , 1 . 5 ) node [ l a b e l= above : U n i t a r y E l a s t i c ] {} ( $ ( c ) + ( . 1 , . 1 ) $ ) ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e 1 4 : An e x c i s e t a x

\ b e g i n { t i k z p i c t u r e } [ domain =0:5 , s c a l e =1, t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l o w s c o o r d i n a t e c a l c u l a t i o n s . %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ d i n t { 4 . 5 } %Yi n t e r c e p t f o r DEMAND. \ def \ d s l p { 0.5} %S l o p e f o r DEMAND. \ def \ s i n t { 1 . 2 } %Yi n t e r c e p t f o r SUPPLY. \ def \ s s l p { 0 . 8 } %S l o p e f o r SUPPLY. \ def \ tax { 1 . 5 } %E x c i s e ( peru n i t ) t a x

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Figure 14: An excise tax P Supply Pd tax Ps P (q) = 1 q + 2

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\ def \ s u p p l y {\x , { \ s s l p \ x+\ s i n t }} \ def \demandtwo {\x , { \ d s l p \ x+\d i n t+\dsh }} \ def \ supplytwo {\x , { \ s s l p \ x+\ s i n t +\s s h }}

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% Define coordinates . \ coordinate ( i n t s ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( ep ) a t ( 0 , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( eq ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , 0 ) ; \ coordinate ( d i n t ) a t ( 0 , { \ d i n t } ) ; \ coordinate ( s i n t ) a t ( 0 , { \ s i n t } ) ; \ coordinate ( t e q ) a t ( { ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p ) } , 0 ) ; %q u a n t i t y \ coordinate ( t e p ) a t ( 0 , { ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t +\tax } ) ; %p r i c e \ coordinate ( t i n t ) a t ( { ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p ) } , { ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t +\tax } ) ; %t a x e q u i l i b r i u m \ coordinate ( s e p ) a t ( 0 , { \ s s l p ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p )+\ s i n t } ) ; \ coordinate ( s e n ) a t ( { ( \ s i n t +\tax \d i n t ) / ( \ d s l p \ s s l p ) } , { \ s s l p ( \ s i n t +\tax \ d i n t ) / ( \ d s l p \ s s l p )+\ s i n t } ) ; % DEMAND \draw [ t h i c k , c o l o r=b l u e ] p l o t ( \ demand ) node [ r i g h t ] {$P( q ) = \ f r a c {1}{2} q+\ f r a c {9}{2}$};

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%SUPPLY \draw [ t h i c k , c o l o r=p u r p l e ] p l o t ( \ s u p p l y ) node [ r i g h t ] { Supply } ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$Q$ } ; \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ above ] {$P$ } ; \draw [ d e c o r a t e , d e c o r a t i o n ={b r a c e } , t h i c k ] ( $ ( s e p ) +( 0.8 ,0) $ ) ( $ ( t e p ) +( 0.8 ,0) $ ) node [ midway , below=8pt , x s h i f t =18pt ] { tax } ; \draw [ dashed ] ( t i n t ) ( t e q ) node [ below ] {$Q T$ } ; \draw [ dashed ] ( t i n t ) ( t e p ) node [ l e f t ] {$P d $ } ; \draw [ dashed ] ( s e n ) ( s e p ) node [ l e f t ] {$P s $ } ; \end{ t i k z p i c t u r e }

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Figure 15: A price ceiling P Supply

Price Ceiling Pc P (q) = 1 q + 2

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TikZ code : F i g u r e 1 5 : A p r i c e c e i l i n g

\ b e g i n { t i k z p i c t u r e } [ domain =0:5 , s c a l e =1, t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l o w s c o o r d i n a t e c a l c u l a t i o n s . %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ d i n t { 4 . 5 } %Yi n t e r c e p t f o r DEMAND. \ def \ d s l p { 0.5} %S l o p e f o r DEMAND. \ def \ s i n t { 1 . 2 } %Yi n t e r c e p t f o r SUPPLY. \ def \ s s l p { 0 . 8 } %S l o p e f o r SUPPLY.

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\ def \ p f c { 2 . 5 }
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%P r i c e f l o o r or c e i l i n g

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\ def \demand{\x , { \ d s l p \ x+\d i n t }} \ def \ s u p p l y {\x , { \ s s l p \ x+\ s i n t }} % Define coordinates . \ coordinate ( i n t s ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( ep ) a t ( 0 , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( eq ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , 0 ) ; \ coordinate ( d i n t ) a t ( 0 , { \ d i n t } ) ; \ coordinate ( s i n t ) a t ( 0 , { \ s i n t } ) ; \ coordinate ( p f q ) a t ( { ( \ pfc \d i n t ) / ( \ d s l p ) } , 0 ) ; \ coordinate ( pfp ) a t ( { ( \ pfc \d i n t ) / ( \ d s l p ) } , { \ p f c } ) ; \ coordinate ( s f q ) a t ( { ( \ pfc \ s i n t ) / ( \ s s l p ) } , 0 ) ; \ coordinate ( s f p ) a t ( { ( \ pfc \ s i n t ) / ( \ s s l p ) } , { \ p f c } ) ; % DEMAND \draw [ t h i c k , c o l o r=b l u e ] p l o t ( \ demand ) node [ r i g h t ] {$P( q ) = \ f r a c {1}{2} q+\ f r a c {9}{2}$}; %SUPPLY \draw [ t h i c k , c o l o r=p u r p l e ] p l o t ( \ s u p p l y ) node [ r i g h t ] { Supply } ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$Q$ } ; \draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ above ] {$P$ } ; %P r i c e f l o o r and c e i l i n g l i n e s \draw [ dashed , c o l o r=b l a c k ] p l o t ( \ x , { \ p f c } ) node [ r i g h t ] {$P c $ } ; \draw [ dashed ] ( pfp ) ( p f q ) node [ below ] {$Q d $ } ; \draw [ dashed ] ( s f p ) ( s f q ) node [ below ] {$Q s $ } ; \draw[>, b a s e l i n e =5] ( $ ( 0 , { \ p f c } ) + ( 1 . 5 , 0 . 7 ) $ ) node [ l a b e l= l e f t : P r i c e C e i l i n g ] {} ( $ ( 0 , { \ p f c } ) + ( . 1 , 0 . 1 ) $ ) ; \end{ t i k z p i c t u r e }

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TikZ code : F i g u r e 1 6 : A p r i c e f l o o r

\ b e g i n { t i k z p i c t u r e } [ domain =0:5 , s c a l e =1, t h i c k ] \ u s e t i k z l i b r a r y { c a l c } %a l l o w s c o o r d i n a t e c a l c u l a t i o n s . %D e f i n e l i n e a r p a r a m e t e r s f o r s u p p l y and demand \ def \ d i n t { 4 . 5 } %Yi n t e r c e p t f o r DEMAND. \ def \ d s l p { 0.5} %S l o p e f o r DEMAND. \ def \ s i n t { 1 . 2 } %Yi n t e r c e p t f o r SUPPLY. \ def \ s s l p { 0 . 8 } %S l o p e f o r SUPPLY.

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Figure 16: A price oor P Supply Price Floor Pf

P (q) = 1 q + 2

9 2

Qd

Qs

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\ def \ p f c { 3 . 8 }
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%P r i c e f l o o r or c e i l i n g

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\ def \demand{\x , { \ d s l p \ x+\d i n t }} \ def \ s u p p l y {\x , { \ s s l p \ x+\ s i n t }} % Define coordinates . \ coordinate ( i n t s ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( ep ) a t ( 0 , { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) \ s s l p +\ s i n t } ) ; \ coordinate ( eq ) a t ( { ( \ s i n t \d i n t ) / ( \ d s l p \ s s l p ) } , 0 ) ; \ coordinate ( d i n t ) a t ( 0 , { \ d i n t } ) ; \ coordinate ( s i n t ) a t ( 0 , { \ s i n t } ) ; \ coordinate ( p f q ) a t ( { ( \ pfc \d i n t ) / ( \ d s l p ) } , 0 ) ; \ coordinate ( pfp ) a t ( { ( \ pfc \d i n t ) / ( \ d s l p ) } , { \ p f c } ) ; \ coordinate ( s f q ) a t ( { ( \ pfc \ s i n t ) / ( \ s s l p ) } , 0 ) ; \ coordinate ( s f p ) a t ( { ( \ pfc \ s i n t ) / ( \ s s l p ) } , { \ p f c } ) ; % DEMAND \draw [ t h i c k , c o l o r=b l u e ] p l o t ( \ demand ) node [ r i g h t ] {$P( q ) = \ f r a c {1}{2} q+\ f r a c {9}{2}$}; %SUPPLY \draw [ t h i c k , c o l o r=p u r p l e ] p l o t ( \ s u p p l y ) node [ r i g h t ] { Supply } ; %Draw axes , and d o t t e d e q u i l i b r i u m l i n e s . \draw[>] ( 0 , 0 ) ( 6 . 2 , 0 ) node [ r i g h t ] {$Q$ } ;

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\draw[>] ( 0 , 0 ) ( 0 , 6 . 2 ) node [ above ] {$P$ } ;

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%P r i c e f l o o r and c e i l i n g l i n e s \draw [ dashed , c o l o r=b l a c k ] p l o t ( \ x , { \ p f c } ) node [ r i g h t ] {$P f $ } ; \draw [ dashed ] ( pfp ) ( p f q ) node [ below ] {$Q d $ } ; \draw [ dashed ] ( s f p ) ( s f q ) node [ below ] {$Q s $ } ; \draw[>, b a s e l i n e =5] ( $ ( 0 , { \ p f c } ) + ( 1 . 5 , 0 . 7 ) $ ) node [ l a b e l= l e f t : P r i c e F l o o r ] {} ($(0 ,{\ pfc }) +( .1 ,0.1) $) ; \end{ t i k z p i c t u r e }

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Other Resources
Some useful resources for diagrams are as follows: http://www.texample.net/tikz/examples/ - This site has many examples of TikZ diagrams from a variety of disciplines (including mathematics, economics, and electrical engineering), however not all the supplied code works perfectly right out of the box. This is a good place to see the capability of TikZ http://sourceforge.net/projects/pgf/ - This is where you can acquire the latest version of TikZ. http://cran.r-project.org/web/packages/tikzDevice/vignettes/tikzDevice.pdf - tikzdevice is a package that allows you to generate tikz code directly from [R] statistical software for input into a LateX document. http://www.tug.org/pracjourn/2007-1/mertz/mertz.pdf - This is a 22-page tutorial on TikZ, that perhaps gives a more in depth treatment of some of the topics discussed here. http://www.math.ucla.edu/~getreuer/tikz.html - This has some more examples from a mathematician at UCLA.

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