1An example of physical capital is: a $100 bill. b stock certificate. c chainsaw. d municipal bond.

1An example of physical capital is:

a $100 bill.

b stock certificate.

c chainsaw.

d municipal bond.

2If the price of a good decreased,

​a It would also increase the quantity exchanged if it was caused by an increase in demand.

b It would also decrease the quantity exchanged if it was caused by an increase in supply.

c We would not know how quantity would change if we didn't know whether it was due to a change in demand or a change in supply.

d All of the above would be true.

3When demand is elastic:

a price elasticity of demand is less than one.

​b consumers are relatively responsive to changes in price.

c the percentage change in quantity demanded resulting from a price change is less than the percentage change in price.

d all of the above are correct.

4 A negative externality is present whenever:

a the private marginal cost of an activity exceeds the private marginal benefit.

b the private marginal benefit of an activity exceeds the private marginal cost.

c the social marginal cost of an activity exceeds the private marginal cost.

d none of the above