Kindly provide the correct answers and explanation for each of the following questions:

5. If demand is price inelastic, then a. buyers do not respond much to a change in price b. buyers respond substantially to a change in price, but the response is very slow c. buyers do not respond much to advertising, fads, or general changes in tastes the demand curve is very flat 6. According to the graph on the right, the equilibrium price in the market before the tax is imposed a. $3.50 Price b. $5.00 C. $6.00 d. $8.00 7. Market failure is the inability of a. some unreg Tated markets to allocate resources efficiently b. a market to establish an equilibrium price C. buyers to place a value on the good or service d. buyers to interact harmoniously with sellers In the market 8. Claudia would be willing to pay as much as $100 per week to have her house cleaned. John's opportunity cost of cleaning Claudia's house is $70 per week. Assume Claudia is required to pay a tax of $40 when she hires someone to clean her house for a week. Which of the following is correct? a. Claudia will now clean her own house b. John will continue to clean Claudia's house, but his producer surplus will decline. c. Claudia will continue to hire John to clean her house, but her consumer surplus will decline. Total economic welfare (consumer surplus plus producer surplus plus tax revenue) will increase. 9. Within a country, the domestic price of a product will equal the world price if a. trade restrictions are imposed on the product b. the country chooses to import, but not export, the product C. the country chooses to export, but not import, the product d. the country allows free trade1. A rational decision maker does which of the following? a. Takes an action only If the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions b. Takes an action only if the marginal benefit of that action exceeds the marginal cost of that action c. Ignores marginal changes and focuses instead on "the big picture" d. Ignores the likely effects of government policies when he or she makes choices 2. Economists generally believe that making assumptions is a. a good idea, since doing so helps to simplify the complex world and make it easier to understand b. a good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand C. a bad idea, since doing so invariably leads to data-collection problems d. a bad idea, since doing so leads to the omission of important ideas and variables from economic models 3. Comparative advantage is based on a. dollar price b. labor cost C. capitol cost d. opportunity cost 4. In a market economy a. demand determines supply and supply, in turn, determines prices b. supply determines demand and demand, in tum, determines prices C. supply and demand determine prices and prices, in turn, allocate the economy's scarce resources d. the allocation of scarce resources determines prices and prices, in tum, determine supply and demand10. Employing a lawyer to draft and enforce a private contract between parties wishing to solve an extemality problem is an example of a(n) cost a. opportunity b. implicit C. sunk d. transaction 11. The government provides public goods because a. private markets are incapable of producing these types of goods b. free-riders make it difficult for private markets to supply the socially optimal quantity markets are always better off with some government oversight d. external benefits will accrue to private producers 12. To gauge the sacrifice made by a taxpayer, we should use the tax rate. a. marginal b. average C. sales d. lump-sum 13. Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that a. consumers do not react to changing prices b. there are diseconomies of scale in retail sales C. there are economies of scale in retail sales d. there are diminishing returns to producing and selling retail goods 14. For any given price, a firm in a competitive market will maximize profit by selecting the level of output at which price intersects the a. average total cost curve b. average variable cost curve C. buyers marginal cost curve d. marginal revenue curve15. For a monopoly firm, which of the following equalities is always true? Price = average revenue b. Price = marginal revenue C. Price = total revenue d. Marginal revenue = marginal cost 16. When a firm operates with excess capacity a. It must be a perfectly competitive firm b. It must be a monopolistically competitive firm c. additional production would increase the average total cost d. additional production would lower the average total cost 17. Oligopolies can end up looking like competitive markets if the number of firms is a. small and they all cooperate b. small and they do not cooperate c. large and they all cooperate d. large and they do not cooperate 18. Which of the following would shift a market labor supply curve to the left? a. Labor-augmenting technology b. A change in worker tastes so that workers want to retire later C. A decrease in the supply of factors such as capital d. An increase in the wage paid to workers in a competing market 19. The belief that education makes a person more productive and thereby raises his or her wage is referred to as the view of education. compensating-differential b. human-capital C. natural-ability d. unmeasured-variables20. Judging from the figure, a person that chooses to consume bundle C is likely to a. receive higher total utility Quantity of than at point A b. gain more satisfaction from bundle C than bundle A C. receive higher marginal utility from Ho-Ho's than from Twinkles d. receive higher marginal utility from Twinkies than from Ho-Ho's Quantity of Ho-Ho's