1-An externality is a cost or benefit of doing business which does not fall to the buyer or the seller.

True

False

2-Consumer surplus is the advantage which we have as part of a marketplace, measured by the area between the Demand Curve and the Equilibrium Price.

True

False

3-Which of the following would not happen first if there were a sudden increase in the demand for Shoes?

The Quantity Demanded at Market price would be higher than Quantity supplied

The Supply of Shoes would increase

A shortage would eventually be created by the increase in demand

the price of shoes would eventually be driven up by the shortage.