Question 1

The term productive efficiency refers to

Accepted Answer

A) any short-run equilibrium position of the competitive firm 
B) the production of all goods and services that consumers need 
C) the production of a good at the lowest long-run average cost 
D) the equality between average total and average variable cost 
E) satisfying the condition that MR = MC 
A) any short-run equilibrium position of the competitive firm 
B) the production of all goods and services that consumers need 
C) the production of a good at the lowest long-run average cost 
D) the equality between average total and average variable cost 
E) satisfying the condition that MR = MC

Question 2

In the short run, producers derive surplus from market exchange because

Accepted Answer

A) total revenue is greater than the minimum amount they would require to sell the good 
B) total revenue is equal to the minimum amount they would require to sell the good 
C) total revenue is less than the minimum amount they would require to sell the good 
D) marginal revenue equals average total cost 
E) they can rob consumers of most of their consumer surplus 
A) total revenue is greater than the minimum amount they would require to sell the good 
B) total revenue is equal to the minimum amount they would require to sell the good 
C) total revenue is less than the minimum amount they would require to sell the good 
D) marginal revenue equals average total cost 
E) they can rob consumers of most of their consumer surplus

Question 3

When an industry supply curve increases enough to erase economic profits,

Accepted Answer

A) weaker firms exit the industry 
B) quantity demanded decreases, but only slightly 
C) all firms in the industry incur economic losses 
D) entry of new firms and expansion of existing firms stop 
E) marginal revenue increases 
A) weaker firms exit the industry 
B) quantity demanded decreases, but only slightly 
C) all firms in the industry incur economic losses 
D) entry of new firms and expansion of existing firms stop 
E) marginal revenue increases

Question 4

With the total cost and total revenue curves, we measure economic profit by the ________ between the two curves.With the per-unit curves, we measure economic profit by a(n)_______.

Accepted Answer

A) vertical distance, horizontal distance 
B) vertical distance, area 
C) area, area 
D) area, vertical distance 
E) horizontal distance, area 
A) vertical distance, horizontal distance 
B) vertical distance, area 
C) area, area 
D) area, vertical distance 
E) horizontal distance, area

Question 5

Figure 8-21   Consider Figure 8-21.If the market price is P1, which of the following best describes the long-run implications for the industry?

Accepted Answer

A) Profit will attract new resources to the industry and drive the market price down. 
B) Profit will attract new resources to the industry and drive prices up. 
C) The lack of profit will lead to the maintenance of the status quo. 
D) Losses will drive resources from the industry and drive market price down. 
E) Losses will drive resources from the industry and drive market prices up. 
A) Profit will attract new resources to the industry and drive the market price down. 
B) Profit will attract new resources to the industry and drive prices up. 
C) The lack of profit will lead to the maintenance of the status quo. 
D) Losses will drive resources from the industry and drive market price down. 
E) Losses will drive resources from the industry and drive market prices up.

The term productive efficiency refers to

In the short run, producers derive surplus from market exchange because

When an industry supply curve increases enough to erase economic profits,

With the total cost and total revenue curves, we measure economic profit by the __ between the two curves.With the per-unit curves, we measure economic profit by a(n)_.

Figure 8-21 Consider Figure 8-21.If the market price is P₁, which of the following best describes the long-run implications for the industry?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exam 8: B--Perfect Competition

The term productive efficiency refers to

In the short run, producers derive surplus from market exchange because

When an industry supply curve increases enough to erase economic profits,

With the total cost and total revenue curves, we measure economic profit by the ________ between the two curves.With the per-unit curves, we measure economic profit by a(n)_______.

Figure 8-21 Consider Figure 8-21.If the market price is P1, which of the following best describes the long-run implications for the industry?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

With the total cost and total revenue curves, we measure economic profit by the __ between the two curves.With the per-unit curves, we measure economic profit by a(n)_.

Figure 8-21 Consider Figure 8-21.If the market price is P₁, which of the following best describes the long-run implications for the industry?