Economics

1. What kinds of liabilities are sole proprietors subject to? 2. Why are many sole proprietors unable to offer advancement and fringe benefits? 3. Why does government allow natural monopolies? 4. How do general partnerships, limited partnerships and limited liability partnerships differ? 5. What are the disadvantages of partnerships? 6. How does a corporation differ from a sole proprietorship or partnership? 7. What information is required in a certificate of incorporation? 8. Why must stockholders pay taxes on dividends? 9. How do horizontal mergers, vertical mergers and conglomerates differ? 10. How might a corporation benefit by being multinational?

1. What is a market structure dominated by one large seller? 2. Why must perfectly competitive markets always deal in commodities? 3. Why does government allow natural monopolies? 4. What kinds of government monopolies exist? 5. What is an oligopoly? 6. What is a cartel? 7. Why are economists skeptical about most claims of predatory pricing? 8. Why did the government pass antitrust laws? 9. What are some examples of industries that have been deregulated since the 70s and 80s? 10. What have been the benefits of deregulation?

1. What example of a price ceiling does the text give? Explain. 2. Why do few people benefit from price ceilings? 3. How do rent control laws affect price equilibrium? 4. What two examples of price floors does the text give? Explain? 5. What will happen to suppliers in a market if there is a surplus of the good they sell, but no supplier can afford to lower prices? 6. List three reasons why a price-based system works more efficiently than central planning. 7. What do you think Adam Smith would think of rationing? Explain. 8. How do prices act as a “language” in the free market?. 9. What alternative is there to participating in a market controlled by government? 10. What’s another term for externalities? How does it affect price and supply?

1. According to the law of supply, what will happen to production as the price of a good goes higher? 2. What is the difference between supply and quantity supplied? 3. How does the quantity supplied of a good with a large elasticity of supply react to a price change? 4. What are production costs that do not change with the level of output? 5. How does the marginal product of labor change as more workers are hired? 6. What is the impact of diminishing marginal returns to labor? 7. Give an example of a fixed cost and a variable cost of a bakery. 8. How does a firm calculate marginal cost? 9. How does a subsidy affect supply? 10. How can regulation affect a producer’s output decisions?

1. What are the three characteristics of a demand curve? 2. What does it mean when the demand for a product is inelastic? 3. What is one good that can be considered a compliment for another? 4. What are two goods that can be considered substitutes? 5. What would happen to the demand curve for Metallica CDs if they become unpopular because people find out they don’t even play their own instruments? 6. What would happen to the revenue of a DVD rental store if the demand is highly elastic and the prices go up? 7. Name a good with elastic demand at its current price. 8. Why is demand for home heating fuels inelastic in cold weather? 9. How do we calculate total revenue? 10. What are the four factors that affect elasticity?

1. How does the government intervene to protect public health, safety and well-being? 2. What are the main programs through which the government redistributes income? 3. What are the differences between the public and private sectors? 4. What are some examples of “negative externalities”? 5. What are some examples of “positive externalities”? 6. Why are street lights an example of a public good? 7. How does calculating GDP help the government track the business cycle? 8. What are the phases of the business cycle? 9. What’s the difference between micro and macroeconomics? 10.What is the government’s role in encouraging innovation?

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