Part 3 Thinking/Inquiry (16 marks) 1. State TRUE or FALSE for the following statements [6 marks] a) Externality occurs when costs or benefits of a good are passed on someone else b) Market economy is also referred to as Socialism while Command economy is referred to as Capitalism. c) "A rise in average temperatures will increase the demand for sun screen products" is a normative economic statement. d) When the price of a good decreases, it will cause the Quantity Supplied to increase. e) When the price increases by 1 and causes QD to decrease by exactly 1, it is referred to as perfectly elastic. f) If the price floor is set above equilibrium, it won't work. 2. Read the following statements and identify if the statement is related to a market or command economy. [4 marks] a) Work incentives are less in this type of economic system. b) In this type of economic system, sellers will sell their products for the most favourable price. c) It is a consumer orientated production system. d) In this economic system, consumers have no influence on the products that they are getting. 3. Draw the political economy spectrum using the space below, and label Capitalism, Fascism