1. Name a "negative externality". Explain briefly.

2. On a graph, compare the market price for the good where the externality exists, and what the market would look like if the externality were internalized.Describe briefly.

3. What does it mean for a good/service to be "excludable" in consumption? How does this differ from whether a good is "rival" in consumption or not? Give examples.

4. Describe a company, or an entire industry (an industry is a group of companies all producing more or less the same product or service) that you believe can experience "Economies of Scale". Explain briefly why "being big" would lead to lower average unit costs.

5. Use one or two graphs to demonstrate what would prevail in a perfectly competitive market where firms are earning economic (excess) profits (profits in excess of opportunity costs). Describe how the market as a whole would adjust to this situation, and how this would affect the typical firm. You can do this in one or in two different sets of graphs.

6. Pick a company with which you are familiar.Describe how the firm's characteristics match or diverge from the requirements of perfectly competitive firms.