PART-A
Answer in one to two paragraphs each.
1. List and briefly explain the determinants of price elasticity of demand.
2. Describe a government created/supported monopoly. Why might one be created? Give an example.
3. Modern economists do not consider the growing population of the planet to be an immediate threat to our resources suppliers. Explain the factors that contribute to this viewpoint.
PART-B
Answer in one to four sentences each.
1. Explain the role of opportunity costs in differentiating between economic profit and accounting profit.
2. What are the characteristics of private goods as opposed to public goods?
3. Professional organizations (such as the American Medical Association and the American Bar Association) have actively advocated for licensing to restrict entry into a profession. Describe the economic incentives that might exist for incumbent professionals to restrict new entrants into the market.
4. Explain the difference between government purchases and transfer payments.
5. What are the disadvantages of flexible exchange rates?
6. When discussing a firm's ability to react to changes in demand, what is the main difference between the short run and the long run?
7. What is the main decision made by firms engaged in the extraction of nonrenewable resources? What could lead to less current extraction for such a business?
8. Describe why a consumer who chooses a consumption bundle in which the relative price exceed the marginal rate of substitution can't be at an optimum.
9. The consumption of alcohol is often cited as an example of a negative externality. Explain a situation in which the consumption of alcohol would be considered to be a negative externality.
10. Describe the role that diminishing marginal utility plays in the utilitarian argument or redistribution of income.
