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.

Be sure to carefully read each question to ensure that each component is answered with the appropriate depth and detail. Assignment questions are cumulative, meaning they will have questions from the current and previous lessons. Your answers should be free of spelling and grammar errors. When you use reference material, you must properly cite your sources with in-text citations. You must also include a reference list. All documentation must be rendered in APA citation style. (See announcements for details on APA.)

Lesson 2

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.

Lesson 4

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.

Lesson 6)

1. How are scarcity, choice, and opportunity cost related?

2. What are the effects of an increase in the minimum wage in the U.S. economy? Who would be most affected?

3, Why is elasticity of demand greater for goods that are a large share of a consumer's budget?

4, What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain.

5, Differentiate between the short run and the long run? What is the appropriate time dimension of the long run?

Lesson 8)

1. What is a price taker? Discuss the assumptions that are made in order to obtain the perfectly competitive model.

2. Define the short-run break-even price. What are economic profits at this price? Why would a firm be willing to operate permanently at this price?

3. An upscale bistro in a small town charges higher prices for the same menu items at dinner time than at lunch time. Does the bistro necessarily practice price discrimination? Explain your answer.

4. What is the social cost of a monopoly? Explain.

5. Explain why the amount that firms spend on advertising depends upon the characteristics of their products.

Lesson 12)

1) What is a monopolist, and what is required in order for a monopolist to earn profits in the long run? How is government involved with the creation of barriers to entry?

2) What is the most important characteristic of monopolistic competition? How do firms behave differently from perfect competitors? What are the implications of having a large number of firms in a monopolistically competitive marke

3) Suppose that the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods that are a substitute for workers. What happens to the market for autoworkers? Explain. Now, suppose that the automakers improve working conditions at the plants. What are the effects? Explain.

4) Discuss the significant laws passed since the Great Depression that affect labor-management relations. Explain.

5) Explain the three categories of balance of payments transactions.