1. Discuss the following statement: "In a competitive market the least-cost production techniques are revealed by entry and exit, while in public utility regulation they are revealed by commission rate hearings. It is easier to fool the commission than the market. Therefore whenever possible, competition should be permitted."
2.  "Debtors are exploited by creditors because a person who has to borrow is usually in distress and is willing to pay a very high price to get the loan. Unless laws were passed controlling the rate of interest, debtors would be forced to pay unreasonable rates of interest." Is the analysis correct? Explain why or why not.
3.  Both monopolists and purely competitive firms are assumed to behave as if they seek to maximize profits, yet monopoly is held to result in an inefficient allocation of resources as compared to pure competition. Explain. Marginal costs serve as a guide as to how much of a good product, while average variable costs help indicate whether to produce at all. Explain.

The National Teacher's Federation, a teacher's union, advocates a single salary scale wherein every teacher, regardless of specialty, gets the same salary his first year of teaching, with salary thereafter tied strictly to years of service. Who would suffer (why) and who would benefit (why) if that were made universal: Men or women? Negroes or whites? Superior or inferior teachers? Mathematics or physical-education teachers?