Question Packet for Unit 2: Microeconomics Chapters 4-7 in your textbooks Chapter 4- Demand 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

14. 15. What is Microeconomics? What does the Law of Demand state? What are three characteristics of demand? What is the difference between an individual and market schedule? Give me an example of how diminishing marginal utility takes place. What is the difference between change in quantity demanded and changes in demand? What two effects directly affect quantity demanded? What are the six factors that affect demand curves? If oranges go up in price and the demand goes up for apples, then which effect has taken place? How does consumer taste affect changes in demand? Give an example. What is elasticity? What is the difference between an elastic and inelastic product? What major factor determines the elasticity of a product? What 3 questions play a part in determining elasticity? Give me an example of an elastic product and inelastic product and tell me why it is that way.

Chapter 5- Supply and Production 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Supply deals with which side of the economic process? What does the Law of Supply state? How does a supply curve differ from a demand curve? What factors affect changes in supply? Explain how a piece of technology can affect supply. How does supply elasticity differ from demand elasticity? What is the Law of Variable Proportions? What is the major variable that is changed in regards to short runs and long runs? What are the three stages of production? What is the Law of Diminishing Returns? Give me an example. Why would businesses analyze costs of inputs? What are the 3 major types of costs that affect production? What relationship do fixed costs and variable costs have on small businesses? What is overhead and how does that affect profits? What is a profit-maximization point?

Question Packet for Unit 2: Microeconomics Chapters 4-7 in your textbooks Chapter 6- Price 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. What is price? What are advantages of having a price system? How would transactions take place without a price? How are these methods unfair? How do prices act as signals? What is market equilibrium? How is an equilibrium price reached? How do you counteract a surplus? How does a change in price occur? What does the Competitive Price Theory say? What is a price ceiling? Give an example. What is a price floor? Give an example. What are price floors and ceilings designed to do? Nonrecourse loans and deficiency payments act on what? How do we have a talking market?

Chapter 7- Market Structures 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. How does laissez-faire play a role in market structures? 5 major characteristics of perfect competition? What occurs under Monopolistic Competition? In what illegal activities do Oligopolies engage? What is this called? What are four types of Monopolies? Give examples of each. How does inadequate competition cause a market failure? What three major factors cause market failures? What is an externality? What is an example of positive externality and negative externality? How do public goods affect market failures? What are three major reasons government intervenes in economic affairs? What two major pieces of legislation were passed to prevent trusts? What did Clayton Antitrust Act outlaw? How does government use taxes to lessen negative externalities? What two forms of disclosure are used to keep consumers informed?