Question 3

What is the effect of a decrease in business taxes?

	A.	It will cause a decrease in demand.
	B.	It will cause an increase in demand.
	C.	It will cause an increase in supply.
	D.	It will cause an increase in the quantity supplied.

Question 7

Can a firm earn an economic loss and an accounting profit at the same time? Explain.

Question 10

The following table shows the market demand and supply for Gala apples in Red Deer.

Price	Quantity Demanded	Quantity Supplied
0	250	90
1	220	100
2	190	110
3	160	120
4	130	130
5	100	140
6	70	150

a) What are the equilibrium price and quantity? b) Suppose that the supply increases by 80, what would be the new equilibrium price and quantity? c) After the increase in supply, what would be the surplus/shortage at a price of $3?