provide all the answers. A. 1. Give one (1) assumption of consumer theory and relate it to your real-life experiences as a consumer. 2. The marginal rate of substitution diminishes along an indifference curve. Select the correct response: True False 3. Individuals must sacrifice more working hours if they want more income. Select the correct response: True False 4. In consumption theory, both borrowing and saving is considered a normal part of consumer behavior. Select the correct response: True False 5. Consumption bundles are chosen by the consumer. Select the correct response: True False 6. Consumers prefer gifts in-kind rather than gift certificates. Select the correct response: True False 7. Customers would always want to have more of a good. Select the correct response: True False 8. Indifference curves are bowed towards the origin because people prefer to have a variety of goods than a lot of just one thing. Select the correct response: True False 9. When analyzing consumer behavior, only a seller is expected to know information about the product. Select the correct response: True False 10. A budget line's slope shows the total price of the bundle of goods. Select the correct response: True False 11. Transitivity in consumer choice means that consumers know how much utility each bundle of goods can give them. Select the correct response: True False B. 12 . Which of the following cost curves look the same? Select the correct response: A. AVC and ATC B. MC and AC C. TC and AC D. AVC and AFC 13. How will an isocost line change if there is an increase in the price of one input, but not the other? Select the correct response: A. Isocost will be flatter B. Isocost will be steeper C. Isocost will move away from the origin D. Isocost will move towards the origin 14. When is cost minimal? Select the correct response: A. When all inputs are substitutable B. When slope of the isoquant is equal to the slope of the isocost C. When all isocosts are linear D. When all costs variable 15. Which of the following is preferred by firms in the long run? Select the correct response: A. Economies of scale B. Constant returns to scale C. Equilibrium returns to scale D Diseconomies of scale 16. When is the average fixed costs highest? Select the correct response: A. When total costs exceed rate of substitution B. When the firm incurs mostly variable costs C. When the business has low levels of output D. When the employees have been paid 17. Which of the following is a fixed cost? Select the correct response: A. Raw materials B. Wages C. Land D. Investment 18. What is the lowest price that a firm is prepared to supply? Select the correct response: A. The price that covers average costs B. The price that covers marginal costs C. The price that covers variable costs D. The price that covers total costs 19. Where is marginal cost derived from? Select the correct response: A. Average costs B. Variable costs C. Total costs D. Fixed costs 20. What does a higher isoquant signify? Select the correct response: A. Higher outputs B. Higher costs C. Higher revenues D. Higher inputs 21. Which of these best describes technical efficiency? Select the correct response: A. Firms can produce at low cost B. Firms have the latest production technology C. Firms produce maximum output D. Firms earn a high profit from selling their goods C. 1. If a firm shuts down temporarily, it does not pay for any costs. Select the correct response: True False 2. If a firm shuts down temporarily, it does not pay for any costs. Select the correct response: True False 3. There is only one (1) firm that can set the price in a perfectly competitive market. Select the correct response: True False 4. If price is lower than average total cost, the firm earns supernormal profits. Select the correct response: True False 5. A firm in a perfectly competitive market cannot set its own output. Select the correct response: True False 6. When firms enter the market in a perfectly competitive industry, the supply curve shifts to the right. Select the correct response: True False 7. Products have more variety and are more innovative under perfect competition. Select the correct response: True False 8. Only the buyers know the quality of goods in a perfectly competitive market. Select the correct response: True False 9. Zero economic profit means the price equals average variable cost. Select the correct response: True False 10. A firm should shut down if the revenue they get is less than the average fixed cost. Select the correct response: True False 11. It is advisable for firms in a perfectly competitive market to advertise. Select the correct response: True False 12. If a firm in a perfectly competitive market decides to produce more, the prices will go up. Select the correct response: True False 13. In a perfect competition, all firms produce the same product. Select the correct response: True False 14. The products in the perfectly competitive market are substitutes for each other. Select the correct response: True False 15. Existing firms have more power than new entrants in a perfectly competitive market. Select the correct response: True False C. 1. Which of these is a characteristic of a Bertrand duopoly? Select the correct response: A. Firms make highly differentiated products. B. There is an industry leader. C. There are high transaction costs. D. Firms make choices about product price. 2. Which of these would discourage entry into an oligopoly market? Select the correct response: A. Minimal advertising B. Minimal innovation C. Large economies of scale D. Common resources 3. Which of the following best describes the dominant strategy in game theory? Select the correct response: A. The decision that will avoid the most unfavorable outcome B. The best outcome irrespective of what the other player chooses C. The decision that offers the maximum amount of benefit D. The best of the worst pay-off decision 4. In this type of game, players have potential for mutual profit. Select the correct response: A. Negative-sum games B. Yield-sum games C. Zero-sum games D. Positive-sum games 5. Which of these is NOT explained in Sweezy's model? Select the correct response: A. Market share distribution B. Competitor's reaction to price changes C. Mutual interdependence D. Price inflexibility 6. What are the two types of collusion? Select the correct response: A. Legal and illegal B. Participative and non-participative C. Covert and tacit D. Horizontal and vertical 7. In the Stackleberg model, which of these is decided by the industry leader? Select the correct response: A. Cost of production B. Quality of products C. Quantity of output D. Profits made 8. Which of these would most likely happen if firms fail to identify the strategy that leads to Nash equilibrium? Select the correct response: A. The firm will have excess capacity. B. The firms would start to use random strategies. C. There will be a price war. D. Consumers will not know which firm to choose. 9. Which of these does NOT describe a Cournot oligopoly? Select the correct response: There are barriers to entry. The firms produce only differentiated products. There are few firms serving many consumers. Each firm believes that rivals would hold input constant if it changes its output. 10. Which type of game exists if a player makes a decision without knowing what the other players have decided? Select the correct response: A. Simultaneous move game B. Sequential move game C. One shot game D. Repeated game