3-4 sentences to answer each question. 1. Why is it necessary to know fixed, variable, and total costs to determine marginal cost?

2. How does prices help us allocate goods and services?

3. What alternative exist to the price system? What challenges does this alternative present?

4. What is the result of a price that is set above the equilibrium price? Below the equilibrium price?

5. How are quantity supplied and quantity demanded affected by changes in prices? Give an example of how these quantities might change if the price decreases?​