1. Name three determinants of elasticity identified in the text. Explain how each one affects the responsiveness of demand.
2. Explain what a "perfectly contestable" market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently.
3. What is adverse selection? Give an example and explain why it is a problem.
4. Define public goods. Give an example of a public good. Explain why private firms will not generally produce public goods.