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1. The author defines market equilibrium as generating the largest possible total surpluses and being efficient when four conditions are met. What is meant by "total surpluses", and what are the four conditions that must be met? Can you name a market in which these conditions exist?
2. Critical Thinking: Let's say your company sells units of salt for $1.00 and wants to increase its revenue by raising the price to $1.20 per unit. We know, from the table on page 102, the price elasticity of demand for salt is 0.1. A member of marketing says that means if we raise price 20%, we will see a 2% reduction in sales. Is there anything wrong with this reasoning? Discuss what is right and wrong with this conclusion.
"A manager is of the view that he is not responsible for the quality of work that he has delegated to his subordinate". Do you agree with his view points? Justify your answ
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