5 Written Questions

1. resources made by man through his abilities and skill, would help man's daily activities become easy Ex:buildings, technology
2. marginal revenue curve will lie below its demand curve
3. testable
4. the ability of consumers to discipline producers is weakened
5. long run average total costs rise as you produce more output

5 Matching Questions

1. Consumer Surplus
2. Inelastic
3. Why does the government sometimes provide public goods?
4. Normative Economic Statements
5. Price elasticity (demand) is larger when...?

1. a Changes in quantity are not as sensitive to the change in price (steeper)
2. b not testable
3. c free-riders make it difficult for private markets to supply the efficient quantity
4. d 1/2bXh, area below the demand curve but above the price, the difference between the maximum consumers are willing to pay and what they will actually pay
5. e people spend a large share of their income on the product

5 Multiple Choice Questions

1. The belief that what is true for one is true for all
   1. Labor Market
   2. Elastic
   3. Fallacy of Composition
   4. Inelastic
2. will be greater in the long run than short run
   1. All things equal, the price elasticity of supply
   2. Diseconomies of Scale
   3. Quantity Demanded or Supplied
   4. Change in Demand or Supply
3. points within the curve, not producing at maximum productivity
   1. Average Total Cost (ATC)
   2. Inefficient Points (PPC)
   3. Unattainable Points (PPC)
   4. Efficient Points (PPC)
4. 1/2bXh, area above the supply curve but below the price, the difference between the minimum producers are willing to acccept and what they actually accept
   1. Producer Surplus
   2. Consumer Surplus
   3. Proprietorship
   4. Price Searcher
5. costs of exit and entry are low
   1. Labor Market
   2. Contestable Market
   3. Consumer Surplus
   4. Middle Men

5 True/False Questions

1. Proprietorship → Business owned by a single individual who is fully liable for all debts

   True        False

2. Socialism → -better than socialism
   -market organization
   -an economic system based on private property and free enterprise

   True        False

3. Economics → the branch of social science that deals with the production and distribution and consumption of goods and services and their management

   True        False

4. Subsidies → Changes in quantity are sensitive to changes in price (flatter)

   True        False

5. Average Fixed Cost (AFC) → will always decrease as output expands

   True        False