Question 1. What is a competitive market? Briefly describe the types of markets other than perfectly competitive markets.
Question 2: Popeye's income declines and as a result he buys more spinach. Is spinach an inferior or a normal good? What happens to Popeye demand curve for spinach?
Question 3: If the elasticity is greater then 1, is demand elastic or inelastic? If the elasticity equals 0, is demand perfectly elastic or perfectly inelastic?
Question 4: If demand is elastic, how will an increase in price change total revenue? Explain.
Question 5: How is the price elasticity of supply calculated? Explain what this measures.
Question 6: Is the price elasticity of supply usually larger in the short run or in the long run? Why?