1.State whether the following statements are TRUE, FALSE, or UNCER- TAIN. You can take the non-italicized portions as given.

(a)(4 Points) Suppose that some firm uses labor and capital to produce output, but is unable to adjust its capital stock in the short-run. True, False, or Uncertain: the supply curve will be more upward-sloping in the short-run than in the long-run.

(b)(4 Points) Let's assume that someone is in the process of adopting a shelter cat (that they already love very much). True, False, or Uncertain: a reasonably risk-averse person should buy fairly-priced "health insurance" that would pay (if needed) for the cat's very expensive life-saving medical procedure over the following year.

(c)(4 Points) Let's continue with the cat example. True, False, or Uncertain: a reasonably risk-averse person should buy "life insurance" that provides a large payout in the event that the cat dies over the following year.