Question: 1. O(True) or X(False)

1. A trade-off is a principle for market activities.

2. A manager's salary is the opportunity cost.

3. A trade provides a division of labor.

4. The market failure always results in the negative externality.

5. An analysis on Trump's tax policy is the normative analysis.

6. The demand change due to a related commodity price change is a demand law.

7. The supply change due to that input price change is a supply law.

8. The right demand shift results into an increase in equilibrium price.

9. The price down of necessity goods results in increases of both demand and total revenue.

10. The price down for long-run results in increases of both demand and total revenue.

11. A control of gasoline price results in more demand for gasolines than supply.

12. An indifference curve is a curve of 2 goods purchase not related to satisfaction.

13. A budget line is a line of 2 goods purchase with a given budget not related to prices.

14. A budget line shifts leftt as a budget increases.

15. The substitution effect of price change is always an inverse relationship.

16. The income effect of price change is always a positive relationship.

17. A consumer surplus is the surplus of consumption which a consumer spends for.

18. A producer surplus is the surplus of producer above the price.

19. The cost equation is not related to output prices.

20. The revenue function is related to output..

21. The export results in extra gain, while the import does not result in extra gain.

22. The Giffen goods are those whose demand decreases due to price change.

23. The labor marginal product is the labor productivity.

24. As the average product decreases, the marginal product decreases always.

25. The average product and marginal product do not cross each other.

26. When price elasticity of demand is less than 1, production increase increases revenue.

27. When price elasticity of demand is greater than 1, production decrease decreases revenue.

2. Summarize

(1) Marginal Principle

(2) Circular Flow Model

(3) Externalities

(4) Demand Elasticity for Price, Income, and Cross-Price

(5) Consumer Optimization Rule

(6) Price Change Effects on Demand in the Short-Run and Long-Run

(7) Substitution effects and income effects

(8) Total Product, Average Product, and Marginal Product

(9) Indifference curve

(10) Isoquant curve

(11) Production Possibility Frontier

(12) Consumer Surplus