Please tell me what grammatical elements can come after a preposition?
1. The situation can be seen as bad.
2. ... between bad and good.
Normally, I think what comes after a preposition is a noun, pronoun or noun equivalent, but I also think an adjective can be used after some prepositions.
If the element after the candidate for a preposition looks like it's not a noun, then either of these holds:
a. The preposition candidate is not a preposition, but perhaps an adverb or conjunction.
b. The structure after the preposition candidate actually is a noun phrase.
Both of your examples are in the category labeled b.
In your first example bad should be viewed as an adjective used as a noun, 'promoted' to a noun because of the elision of situation or its equivalent, one.
The situation can be seen as a bad situation.
The situation can be seen as a bad one.
In your second example, bad and good are simply abstract uncountable nouns meaning that which is bad and that which is good, respectively.
People are waiting to help.
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