1.Under which of the following circumstances is the price likely to fall? (QD is quantity demanded and QS is quantity supplied)

Select one:

a. QD = 1,300; QS = 1,250

b. QD = 1,100; QS = 1,250

c. QD = 1,250; QS = 1,250

d. None of the other answers

2.What do economists mean by the term "the economic capacity"?

Select one:

a. The output where marginal cost is at a minimum.

b. The output where average variable cost is at a minimum.

c. The output where average total cost is at a minimum.

d. The output where average product is at a maximum.

e. The output where total product is at a maximum.

3.What will happen to the total product curve after the point of diminishing return has been reached?

Select one:

a. It will continue rise until marginal product begins to decline

b. It will begin to fall

c. It will start to rise for the first time

d. It will continue to rise until marginal product becomes zero.

4.Which of the following statements is correct regarding normal profits?

Select one:

a. They are what is left over after economic profits are covered.

b.They are calculated by subtracting explicit costs from total revenue.

c. Earning normal profits is considered a necessary part of doing business.

d. They would always be smaller than economic profits.

5.What do economists mean when they say that the economy faces scarcity?

Select one:

a. The resources available are not sufficient to produce all that everyone wants.

b. There are fewer resources available than there were in the 1960s.

c.It is quite evident that the world is running out of resources.

d.The economy is producing far below its capacity to produce.