You have seen different building blocks for describing firm behaviour. Now evaluate cases and decide, which blocks to use for which purpose and why.

Consider the following cases:

1. A model is sought that can describe how fertilizer use in agriculture changes if a tax on some types of fertilizers is introduced.

2. A model shall describe how electricity providers change their production if a CO₂-tax is introduced and what consequences can be expected for the price of electricity.

3. A model should be built that describes how the price on a market for CO₂-emission permits changes if the total number of permits changes.

Which model should be used in each case? Write down your choices for these three cases. Include why you chose a certain building block for 1, 2 and 3.