1.Explain how the market moves to equilibrium in terms of shortages and surpluses and in terms of maximum buying prices and minimum selling prices.

2.Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price of $2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up to $2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?

3.Describe five everyday examples of you or someone else making an interpersonal utility comparison.