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Answer any three of the following questions in a way that demonstrates your new

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Answer any three of the following questions in a way that demonstrates your new mastery of the relevant economic principles. Be thorough & EXPLAIN what you mean – show, don’t tell – provide examples!
1.Name and explain the conditions or assumptions required for perfect competition.
2.Explain what happens in the long run when firms in an industry are earning positive profit, and why economists assume normal profit in competitive industries is 0.
3.Explain the “law” of increasing opportunity costs, why we expect to see this tendency, and how it impacts our graphical representation of a PPF.
4.Why is equilibrium considered efficient?
5.Explain the concept of elasticity (what is it, what does it mean, how is it useful?) and why it is preferable to looking at slope alone.
6.The market for X is experiencing a shortage. Explain what “market forces” are and how they will adjust this market until it reaches equilibrium. Provide an example to illustrate.

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