This document contains 9 statements about economic concepts that are missing a key word to make them true. The missing words are provided to complete the statements. Key concepts addressed include cross price elasticity, income elasticity, demand curves, price elasticity of demand, production levels in perfect competition, requirements for monopoly, substitution effect, inferior goods, and supply curves.

1. You write the missing word that makes each statement true (1) If 2 goods are substitutes, their
cross-price elasticities will be (2) If a good is NORMAL, it will have an income elasticity that is
(3) If John has many close substitutes, his demand curve must be very (4) If elasticity--.3 and
price rises 2 %, quantity demanded will (5) In the long run firms in a perfectly competitive
industry are all producing the level of output. (6) In order to have a monopoly, there must be one
seller, a product that has no close substitutes and _ preventing competition (7) The substitution
effect is caused by a change in (8) A in income will cause the consumer to buy less of an inferior
good. (9) The perfectly competitive firm's supply curve is its cost curve.
Solution
1. If two goods are substitutes their cross price elasticities will be POSITIVE.
2. If a good is Normal, it will have an income elasticity that is POSITIVE.
3. If John has many close substitutes, his demand curve must be very HIGHLY ELASTIC.
4. Quantity Demanded will FALL BY 0.6%.
5. In the long run firms in a perfectly competitive industry are all producing the NORMAL level
of output.
6. GOVERMENT LAWS preventing competition.
7. The substitution effect is caused by a change in PRICE OF THE SUBSTITUTE PRODUCT.
8. A RISE in income will cause the consumer to buy less of an inferior good.
9. The perfectly competitive firm's supply curve is its MARGINAL Cost Curve.