Question

1. Explain the law of demand as it relates to price and quantity.

2. Describe what the concept excess burden means, and how it measures tax inefficiency.

3. Describe the three key elements that result in globalization.

4. Describe the major field of economics called macroeconomics.

5. What are the four types of free market competition?

6. What is the minimum wage law? Provide an example of a minimum wage.

Answer 1

1. The law of demand states, other things/factors remaining constant, the price of a good and quantity demanded are inversely related to each other. That is with an increase in the price of the good, the quantity demanded falls. Also if the price of a good falls the quantity demanded goes if. Considering that the good should be a normal good.Other factors will include price of related goods like substitutes and complements, income of the buyer, population, tastes and preferences. For the law of demand to hold true, the above stated factors must remain constant.