Question 1

The maximum loss a firm will experience in the short run equals

Accepted Answer

A) zero. 
B) its total fixed cost. 
C) its total variable cost. 
D) its total cost. 
E) its marginal cost. 
A) zero. 
B) its total fixed cost. 
C) its total variable cost. 
D) its total cost. 
E) its marginal cost.

Question 2

When a perfectly competitive market is in long-run equilibrium,

Accepted Answer

A) at least one firm makes an economic profit. 
B) all firms make zero economic profit. 
C) firms enter the market if other firms are making an economic profit. 
D) firms exit the market if other firms are incurring an economic loss. 
E) marginal revenue equals minimum average variable cost. 
A) at least one firm makes an economic profit. 
B) all firms make zero economic profit. 
C) firms enter the market if other firms are making an economic profit. 
D) firms exit the market if other firms are incurring an economic loss. 
E) marginal revenue equals minimum average variable cost.

Question 3

Use the table below to answer the following questions.
Table 11.1.1  
-Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 5 units of output,total revenue is

Accepted Answer

A) $15. 
B) $30. 
C) $75. 
D) $90. 
E) $105. 
A) $15. 
B) $30. 
C) $75. 
D) $90. 
E) $105.

Question 4

Use the figure below to answer the following question.   Figure 11.3.3
-Refer to Figure 11.3.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.The firm is

Accepted Answer

A) making an economic profit. 
B) incurring an economic loss. 
C) breaking even. 
D) at its shutdown point. 
E) larger than the other firms in the industry. 
A) making an economic profit. 
B) incurring an economic loss. 
C) breaking even. 
D) at its shutdown point. 
E) larger than the other firms in the industry.

Question 5

Use the figure below to answer the following questions.   Figure 11.4.3
-Refer to Figure 11.4.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.Firms are

Accepted Answer

A) making an economic profit,and some firms leave the market.Market supply decreases. 
B) making an economic profit,and some firms enter the market.Market supply increases. 
C) incurring an economic loss,and some firms leave the market.Market supply decreases. 
D) incurring an economic loss,and some firms enter the market.Market supply increases. 
E) incurring an economic loss,but since they are covering average variable cost,no one will exit the market in the long run. 
A) making an economic profit,and some firms leave the market.Market supply decreases. 
B) making an economic profit,and some firms enter the market.Market supply increases. 
C) incurring an economic loss,and some firms leave the market.Market supply decreases. 
D) incurring an economic loss,and some firms enter the market.Market supply increases. 
E) incurring an economic loss,but since they are covering average variable cost,no one will exit the market in the long run.

Question 6

In the price range below minimum average variable cost,a perfectly competitive firm's supply curve is

Accepted Answer

A) horizontal at the market price. 
B) vertical at zero output. 
C) the same as its marginal cost curve. 
D) the same as its average variable cost curve. 
E) the same as its total variable cost curve. 
A) horizontal at the market price. 
B) vertical at zero output. 
C) the same as its marginal cost curve. 
D) the same as its average variable cost curve. 
E) the same as its total variable cost curve.

Question 7

If a profit-maximizing firm in a perfectly competitive market is incurring an economic loss,then it must be producing a level of output where

Accepted Answer

A) price is greater than marginal cost. 
B) price is greater than marginal revenue. 
C) marginal cost is greater than marginal revenue. 
D) average total cost is greater than marginal cost. 
E) average total cost is less than marginal cost. 
A) price is greater than marginal cost. 
B) price is greater than marginal revenue. 
C) marginal cost is greater than marginal revenue. 
D) average total cost is greater than marginal cost. 
E) average total cost is less than marginal cost.

Question 8

Use the information below to answer the following questions.
Fact 11.2.1 GM to Cut Production and Jobs
General Motors will temporarily idle five U.S.assembly plants that build sedans and coupes,such as the Chevrolet Cruze,Cadillac CTS,and Chevy Camaro,as American motorists by the millions shift from passenger cars to utility vehicles and other light trucks.
Source: The Toronto Star,December 21,2016
-Refer to Fact 11.2.1.The shutdown decision maximizes GM's economic profit (or minimizes its loss)when price is less than

Accepted Answer

A) average variable cost. 
B) total variable cost. 
C) average fixed cost. 
D) total fixed cost. 
E) average total cost. 
A) average variable cost. 
B) total variable cost. 
C) average fixed cost. 
D) total fixed cost. 
E) average total cost.

Question 9

A perfectly competitive market is characterized by

Accepted Answer

A) firms that are price setters. 
B) firms that each face a downward-sloping demand curve. 
C) firms that each sell a unique good or service. 
D) buyers who are unaware of the price charged by each firm. 
E) no restrictions on entry into the market. 
A) firms that are price setters. 
B) firms that each face a downward-sloping demand curve. 
C) firms that each sell a unique good or service. 
D) buyers who are unaware of the price charged by each firm. 
E) no restrictions on entry into the market.

Question 10

Use the table below to answer the following questions.
Table 11.1.1  
-Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output,marginal revenue is

Accepted Answer

A) $15. 
B) $30. 
C) $75. 
D) $90. 
E) $105. 
A) $15. 
B) $30. 
C) $75. 
D) $90. 
E) $105.

Question 11

A firm will shut down temporarily when the price is so low that total revenue is insufficient to cover the

Accepted Answer

A) total cost of production. 
B) total variable cost of production. 
C) total fixed cost of production. 
D) marginal cost of production. 
E) average variable cost of production. 
A) total cost of production. 
B) total variable cost of production. 
C) total fixed cost of production. 
D) marginal cost of production. 
E) average variable cost of production.

Question 12

Use the table below to answer the following questions.
Table 11.2.2  
-Refer to Table 11.2.2,which gives the total cost schedule for Chip's Pizza Palace,a perfectly competitive firm.If Chip shuts down in the short run,his total cost is

Accepted Answer

A) $0. 
B) $10 an hour. 
C) $12 an hour. 
D) $22 an hour. 
E) $40 an hour. 
A) $0. 
B) $10 an hour. 
C) $12 an hour. 
D) $22 an hour. 
E) $40 an hour.

Question 13

A price taker is a firm that

Accepted Answer

A) must lower its price if it wants to sell more output. 
B) sets the market price. 
C) cannot influence the market price. 
D) is incurring an economic loss. 
E) can raise its price if it lowers output. 
A) must lower its price if it wants to sell more output. 
B) sets the market price. 
C) cannot influence the market price. 
D) is incurring an economic loss. 
E) can raise its price if it lowers output.

Question 14

Lin's fortune cookies are identical to the fortune cookies made by dozens of other firms,and there is free entry in the fortune cookie market.Buyers and sellers are well informed about prices.Lin's fortune cookies operates in a ________ market.

Accepted Answer

A) challenging 
B) monopolistic 
C) perfectly competitive 
D) noncompetitive 
E) perfectly competent 
A) challenging 
B) monopolistic 
C) perfectly competitive 
D) noncompetitive 
E) perfectly competent

Question 15

A firm is producing the profit-maximizing amount of output when it is producing where its ________ curve intersects its ________ curve.

Accepted Answer

A) marginal cost;average total cost 
B) marginal cost;average variable cost 
C) marginal cost;marginal revenue 
D) average total cost;average variable cost 
E) total cost;total revenue 
A) marginal cost;average total cost 
B) marginal cost;average variable cost 
C) marginal cost;marginal revenue 
D) average total cost;average variable cost 
E) total cost;total revenue

Question 16

Use the table below to answer the following questions.
Table 11.2.1  
-Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal revenue received from the sale of the 4th unit of output is

Accepted Answer

A) $3. 
B) $15. 
C) $10. 
D) $120. 
E) $30. 
A) $3. 
B) $15. 
C) $10. 
D) $120. 
E) $30.

Question 17

All of the following statements are true except

Accepted Answer

A) consumers allocate their budgets to get the most value possible. 
B) we derive a consumer's demand curve by finding how the best budget allocation changes as the price of a good changes. 
C) firms get the most value out of their resources at every point along a consumer's demand curve. 
D) a competitive equilibrium achieves an efficient outcome. 
E) when firms in perfect competition are away from the long-run equilibrium,the market is still efficient. 
A) consumers allocate their budgets to get the most value possible. 
B) we derive a consumer's demand curve by finding how the best budget allocation changes as the price of a good changes. 
C) firms get the most value out of their resources at every point along a consumer's demand curve. 
D) a competitive equilibrium achieves an efficient outcome. 
E) when firms in perfect competition are away from the long-run equilibrium,the market is still efficient.

Question 18

Use the table below to answer the following questions.
Table 11.2.1  
-Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.If the firm produces 3 units of output,it will

Accepted Answer

A) make an economic profit of $4. 
B) make an economic profit of $90. 
C) incur an economic loss of $4. 
D) break even. 
E) incur an economic loss of $86. 
A) make an economic profit of $4. 
B) make an economic profit of $90. 
C) incur an economic loss of $4. 
D) break even. 
E) incur an economic loss of $86.

Question 19

A perfectly competitive firm's supply curve is the same as its marginal cost curve at all prices above minimum

Accepted Answer

A) average total cost. 
B) average fixed cost. 
C) total cost. 
D) average variable cost. 
E) total variable cost. 
A) average total cost. 
B) average fixed cost. 
C) total cost. 
D) average variable cost. 
E) total variable cost.

Question 20

A firm maximizes profit by producing the output at which marginal cost equals

Accepted Answer

A) marginal revenue. 
B) minimum average total cost. 
C) minimum average variable cost. 
D) average fixed cost. 
E) total revenue. 
A) marginal revenue. 
B) minimum average total cost. 
C) minimum average variable cost. 
D) average fixed cost. 
E) total revenue.

The maximum loss a firm will experience in the short run equals

When a perfectly competitive market is in long-run equilibrium,

Use the table below to answer the following questions. Table 11.1.1 -Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 5 units of output,total revenue is

Use the figure below to answer the following question. Figure 11.3.3 -Refer to Figure 11.3.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.The firm is

Use the figure below to answer the following questions. Figure 11.4.3 -Refer to Figure 11.4.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.Firms are

In the price range below minimum average variable cost,a perfectly competitive firm's supply curve is

If a profit-maximizing firm in a perfectly competitive market is incurring an economic loss,then it must be producing a level of output where

A perfectly competitive market is characterized by

Use the table below to answer the following questions. Table 11.1.1 -Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output,marginal revenue is

A firm will shut down temporarily when the price is so low that total revenue is insufficient to cover the

Use the table below to answer the following questions. Table 11.2.2 -Refer to Table 11.2.2,which gives the total cost schedule for Chip's Pizza Palace,a perfectly competitive firm.If Chip shuts down in the short run,his total cost is

A price taker is a firm that

Lin's fortune cookies are identical to the fortune cookies made by dozens of other firms,and there is free entry in the fortune cookie market.Buyers and sellers are well informed about prices.Lin's fortune cookies operates in a ________ market.

A firm is producing the profit-maximizing amount of output when it is producing where its curve intersects its curve.

Use the table below to answer the following questions. Table 11.2.1 -Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal revenue received from the sale of the 4th unit of output is

All of the following statements are true except

Use the table below to answer the following questions. Table 11.2.1 -Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.If the firm produces 3 units of output,it will

A perfectly competitive firm's supply curve is the same as its marginal cost curve at all prices above minimum

A firm maximizes profit by producing the output at which marginal cost equals

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Perfect Competition

The maximum loss a firm will experience in the short run equals

When a perfectly competitive market is in long-run equilibrium,

Use the table below to answer the following questions. Table 11.1.1 -Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 5 units of output,total revenue is

Use the figure below to answer the following question. Figure 11.3.3 -Refer to Figure 11.3.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.The firm is

Use the figure below to answer the following questions. Figure 11.4.3 -Refer to Figure 11.4.3,which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.Firms are

In the price range below minimum average variable cost,a perfectly competitive firm's supply curve is

If a profit-maximizing firm in a perfectly competitive market is incurring an economic loss,then it must be producing a level of output where

A perfectly competitive market is characterized by

Use the table below to answer the following questions. Table 11.1.1 -Refer to Table 11.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output,marginal revenue is

A firm will shut down temporarily when the price is so low that total revenue is insufficient to cover the

Use the table below to answer the following questions. Table 11.2.2 -Refer to Table 11.2.2,which gives the total cost schedule for Chip's Pizza Palace,a perfectly competitive firm.If Chip shuts down in the short run,his total cost is

A price taker is a firm that

Lin's fortune cookies are identical to the fortune cookies made by dozens of other firms,and there is free entry in the fortune cookie market.Buyers and sellers are well informed about prices.Lin's fortune cookies operates in a ________ market.

A firm is producing the profit-maximizing amount of output when it is producing where its ________ curve intersects its ________ curve.

Use the table below to answer the following questions. Table 11.2.1 -Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal revenue received from the sale of the 4th unit of output is

All of the following statements are true except

Use the table below to answer the following questions. Table 11.2.1 -Refer to Table 11.2.1,which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.If the firm produces 3 units of output,it will

A perfectly competitive firm's supply curve is the same as its marginal cost curve at all prices above minimum

A firm maximizes profit by producing the output at which marginal cost equals

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

A firm is producing the profit-maximizing amount of output when it is producing where its curve intersects its curve.