2. Which of the following is true about economic rent?
(A) It is a wedge in quantities.
(B) It comes from some exclusivity.
(C) It is part of the deadweight loss.
(D) It prevents black market deals.

3. Which of the following is not true about perfect versus monopolistic competition? (A) Individual firm produces more output in perfect than in monopolistic competition. (B) Individual firm charges a lower price in perfect than in monopolistic competition. (C) Individual firm breaks even in long-run equilibrium in both of them. (D) The market supply equals the horizontal summation of each individual firm's supply in both of them.

4. Which of the following is not a characteristic of a monopoly? (A) It is difficult to find substitutes for its product. (B) It is the only supplier in the market. (C) It is a price-taker. (D) It is almost impossible for others to enter.

5. Which of the following statement best describes the concept of consumer surplus? (A) The camera costs exactly my budget for it. (B) It is always a happy surprise to have extra discounts when buying something. (C) The seller refuses to accept a lower price. (D) Consumers are willing to pay more for better quality.

6. If John's consumption for coffee decreases by 15% as the price of coffee increases by 30%, we call John has a(n) _______ demand for coffee. (A) elastic (B) inferior (C) inelastic (D) unit-elastic

7. Which of the following is not true about "long run" in economics? (A) It has to be at least over one year. (B) All inputs are variable inputs. (C) It differs case by case. (D) Every input changes with level of outputs.

8. Given the information below, what is the cost of traveling abroad for the summer? (A) $3,000 (B) $4,600 (C) $5,000 (D) $5,800

9. When there is a shortage in a free market, the (A) price will fall. (B) price will rise. (C) quantity will fall. (D) quantity will rise.

10. Which of the following is true about efficiency wages? (A) Efficiency wages are set below the equilibrium. (B) Efficiency wages cause frictional unemployment. (C) Efficiency wages generate higher average wage costs for employers. (D) Efficiency wages generate higher opportunity costs for employees. 

11. Which of the three goods is a luxury good? (A) Good A (B) Good B (C) Good C (D) None of the above.

12. Rank the three goods in terms of the slope of their demand curves. (A) A > B > C (B) A > C > B (C) C > B > A (D) Not enough information. 

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