1. Why do people engage in trade? If one trading partner gains must the others involved in the transaction lose an equal amount? Why or why not? 2. What is a “middleman?” Provide one example not m

1. Why do people engage in trade? If one trading partner gains must the others involved in the transaction lose an equal amount? Why or why not? 2. What is a “middleman?” Provide one example not mentioned in the text. Do middlemen perform valuable services? Why or why not? 3. How will a consumer decide whether to purchase a good? When a consumer purchases a good, what does this reveal? 4. How does an entrepreneur decide whether to supply a good? Will entrepreneurs continue to supply a good or service if consumers are unwilling to pay a price sufficient to cover the per-unit cost? 5. Incentives matter. Explain why businesses and entrepreneurs are more likely to voluntarily undertake the projects that consumers value highly relative to price and less likely to undertake the government-sponsored projects in which the per-unit cost of production is above the price consumers willingly pay.