Does voluntary exchange create wealth?
A) Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.
B) Uncertain, it will increase wealth if it creates more goods and services; otherwise it exerts no impact on the wealth of people.
C) No, if one person gains, the other party must lose an equal amount.
D) No, exchange merely shuffles the existing supply of goods and services among people.
A) Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.
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In a Stackelberg oligopoly
A) the leader moves first, and the follower chooses its price in the second stage of the game.
B) the leader moves first, and the follower chooses its output in the second stage of the game.
C) both firms act simultaneously, but one chooses price and the other output level.
D) there is no Nash equilibrium.
Use the graph below to identify the efficiency loss when there is underproduction (Q1) and the efficiency loss when there is overproduction (Q3) in a market
If a firm in a perfectly competitive market is currently producing the output where price = marginal cost = average total cost, the firm is:
A. earning a positive economic profit. B. earning a zero economic profit. C. suffering an economic loss. D. All of these
Refer to the information provided in Figure 7.4 below to answer the question(s) that follow. 
Figure 7.4Refer to Figure 7.4. The average product with five workers is
A. 1. B. 2.5. C. 5. D. 11.