Sample Short Answer Questions What role does price play in a market? How do markets respond to surpluses and shortages? Why do you suppose that ticket scalpers exist? It is sometimes said that "There is not enough affordable housing in this country, so we need to impose rent controls." Will this solve the problem? Explain. Explain the law of diminishing marginal productivity. Why does it take place? How do we determine a firm's demand for an input? Explain what we mean by consumer surplus. Does every unit of a product that is sold in a market generate surplus? Explain. What is the "shut down point"? Why is it important? Draw a graph illustrating this point. Describe the process through which a competitive economy moves toward long run equilibrium. Illustrate this process graphically.

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