Answer each of the questions below in short-answer format. Write your responses in complete sentences. Your answers to each question should include 2-3 paragraphs.( 125-250 words)
1. Explain Opportunity Cost and provide an example.
2. What is the difference between absolute advantage and comparative advantage? What is the benefit of trade?
3. Provide a brief description of supply and demand. How is equilibrium used to determine the market price and quantity?
4. Give an overview of what an inferior good is. What will happen when consumer incomes increase? Include an example from your own life
5. Minimum wage is a price floor. Explain some of the impacts that a price floor on the price of labor may cause.
1. What is the price elasticity of demand? How is the price elasticity of demand calculated?
2. Why is time such an important determinant in the elasticity of supply? Is time also important in determining price elasticity of demand? Explain.
3. What is marginal utility? Why is the term marginal important in utility analysis?
4. Describe and explain the three principal methods of financing that are used by corporations.
5. What is the random walk theory? Explain.