1 If a price floor is binding in an input market, the effect on the degree that fixed assets are sunk is: A.) decreased B.) no effect C.) increased D.) indeterminate QUESTION 2 If a price ceiling is binding in an output market, the effect on firms' willingness to pay is: A.) increased B.) decreased C.) unknown D.) no effect QUESTION 3 If a price floor is binding in an output market, the effect on consumer welfare through the income effect is: A.) indeterminate B.) increased C) decreased D.) no effect QUESTION 4 Economics is the study of: A.) Prices B.) The standard of living C.) human interaction in trade D.) Incentives QUESTION 5 The "balance" in microeconomics refers to: A.) Firm revenue = HH income B.) HH Income = Firm Profit C.) HH market negotiating or pricing power = firm market negotiating or pricing power D.) Firm profits = HH economic welfare E.) Firm costs = HH income QUESTION 6 If a price ceiling is binding in an input market, the effect on producer surplus overall, after re-equilibration is: A.) indeterminate B.) increased C.) no effect D.) decreased QUESTION 7 Microeconomics is the study of: A.) Household welfare B.) The gains from trade since we can only consume what we produce under autarky C.) HH and firms exploiting productivity gains from specialization through trade (exchange) D.) FIrm profits driving demand for input