1. If an increase in a product's price increases the total revenue businesses collect, what must be true? A. Exchange is in the elastic part of the demand curve for its product. B. Exchange is in the inelastic part of the demand curve for its product. C. The firm is charging too much. D. The market is not perfectly competitive. E. The product's elasticity coefficient must be greater than one for this range. My Answer: B 2. Which of the following would be considered a factor of production? A. Fresh popcorn B. A family portrait C. Raw steel D. A fountain drink E. A parent playing with her child My Answer: C 3. What is the deadweight loss that results from this externality? A. QE Q* B. PC PE C. PC PP D. (PC PP) x QE E. (PC PP) x (QE Q*) x one half My Answer: B 4. A market has a cost or benefit not internalized, unclear property rights, and high transaction costs. This describes A. monopolistic competition B. a natural monopoly C. an externality D. an oligopoly E. a monopsony My Answer: A 5. If a good's price is lowered