Answer all of the following questions in Microsoft Word file with complete questions and answers and attach it.

1. Do the richest people in world face scarcity of any kind of resource(s)? If they do, explain why?

2. Give an example each for the following statements: a.) Free markets are usually the best allocation mechanism for scarce resources; b.)Governments can sometimes improve the allocation determined through free market participants.

3. Explain, in your words, a situation where you responded to incentives.

4. What trade-off(s) you face as you decide to spend time studying for school?

5. Assuming that you need two types of goods to survive and you have absolute advantage in producing these goods; will there be a possibility where you can improve your consumption with trade? If so, what is the underlying reason?