Answer each of the questions below in short-answer format. Write your responses in complete sentences. Your answers to each question should include 2-3 paragraphs (125-250 words).
1. Why is a point below the production possibilities curve less efficient than a point on that curve?
2. Distinguish a change in demand and a change in quantity demanded. What are the causes of change in demand and quantity demand?
3. Describe the market process that should occur if the price of a product is below its equilibrium price, and then describe what would occur if the price is above its equilibrium price, assuming that there is no market interference.
4. Identify who is and is not included in the labor force, explain how the unemployment rate is calculated, and list and explain the major types or categories of unemployment.
5. What is GDP? Explain the two main methods used to measure GDP. Why is GDP important?