Question 1

For any an increasing-cost industry,the long-run supply curve has:

Accepted Answer

A) an undefined slope. 
B) a negatively slope. 
C) a positive slope. 
D) a zero slope. 
A) an undefined slope. 
B) a negatively slope. 
C) a positive slope. 
D) a zero slope.

Question 2

The long-run supply curve for a constant cost industry is:

Accepted Answer

A) upward sloping. 
B) downward sloping. 
C) horizontal. 
D) U-shaped. 
A) upward sloping. 
B) downward sloping. 
C) horizontal. 
D) U-shaped.

Question 3

Recall the example of increasing-cost industries such as sugar,at a price of 11 cents,the world supply of sugar equals the amount produced in the areas with low production costs.If the price of sugar increases what will happen in the sugar market?

Accepted Answer

A) Sugar production becomes profitable in areas with higher production costs. 
B) The quantity demanded increases. 
C) The quantity supplied increases. 
D) Both A and C 
A) Sugar production becomes profitable in areas with higher production costs. 
B) The quantity demanded increases. 
C) The quantity supplied increases. 
D) Both A and C

Question 4

Input prices fall as entry occurs in an increasing-cost industry.

Accepted Answer

A) True 
 B)False

Question 5

A cost that has already been paid but can be recovered is a sunk cost.

Accepted Answer

A) True 
 B)False

Question 6

What is the shape of the marginal revenue curve for a perfectly competitive firm? Why is it that way?

Accepted Answer

The marginal revenue curve is a horizont

Question 7

Assume a perfectly competitive industry is in long-run equilibrium at a price of $50.If this industry is a constant-cost industry and the demand for the product increases,long-run equilibrium will be reestablished at a price:

Accepted Answer

A) greater than $50. 
B) less than $50. 
C) of $50. 
D) either greater than or less than $50 depending on the magnitude of the decrease in demand. 
A) greater than $50. 
B) less than $50. 
C) of $50. 
D) either greater than or less than $50 depending on the magnitude of the decrease in demand.

Question 8

Assume the data backup industry,a perfectly competitive industry,is in long-run equilibrium with a market price of $3 per 10GB.If demand for data backup decreases and this industry is a decreasing-cost industry,long-run equilibrium will be reestablished at a price:

Accepted Answer

A) greater than $3. 
B) less than $3. 
C) equal to $3. 
D) either greater than or less than $3,depending on the number of firms that enter the industry. 
A) greater than $3. 
B) less than $3. 
C) equal to $3. 
D) either greater than or less than $3,depending on the number of firms that enter the industry.

Question 9

Hurricane Andrew caused the price of ice in Florida to decrease in the short run.

Accepted Answer

A) True 
 B)False

Question 10

Scenario 9.1: 21st Century Pen Inc.produces 2000 pens per day,and hires 20 workers at a cost of $200 per day per worker.The price of each pen is $5 each.21st Century Pen Inc.pays a daily rental rate of $60 on its factory and a daily insurance rate of $20.21st Century Pen Inc.has a ten year lease on the factory and insurance contract for a year,the company has no other expenses.
-Refer to Scenario 9.1.21st Century Pen Inc.will earn positive economic profit as long as price is:

Accepted Answer

A) greater than average variable cost. 
B) greater than average total cost. 
C) greater than marginal cost. 
D) greater than average fixed cost. 
A) greater than average variable cost. 
B) greater than average total cost. 
C) greater than marginal cost. 
D) greater than average fixed cost.

Question 11

A firm suffering economic losses decides whether or not to produce in the short run on the basis of:

Accepted Answer

A) whether revenues cover variable costs. 
B) whether future profits will allow it to recover fixed costs. 
C) whether revenues from operating are sufficient to cover fixed costs. 
D) whether revenues from operating are sufficient to cover fixed plus variable costs. 
A) whether revenues cover variable costs. 
B) whether future profits will allow it to recover fixed costs. 
C) whether revenues from operating are sufficient to cover fixed costs. 
D) whether revenues from operating are sufficient to cover fixed plus variable costs.

Question 12

When a firm's economic profit is equal to one,the firm is at the break-even point.

Accepted Answer

A) True 
 B)False

Question 13

In the long run,if product prices rise firms will not produce more output.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to Figure 9.7.This firm will earn an economic profit of zero if the price is:

Accepted Answer

A) $0. 
B) $4. 
C) $7. 
D) $13. 
A) $0. 
B) $4. 
C) $7. 
D) $13.

Question 15

As more firms leave an industry the market price will increase.

Accepted Answer

A) True 
 B)False

Question 16

Recall the application on economic detective and the case of margarine prices,the margarine industry is an example of a constant-cost industry because as the total output of the industry changes the price of the key inputs to the production of margarine don't change as a result:

Accepted Answer

A) the demand decreases by the same amount. 
B) the supply increases by the same amount. 
C) the unit of cost is unaffected by changes in total output. 
D) the unit of cost is affected by changes in total output. 
A) the demand decreases by the same amount. 
B) the supply increases by the same amount. 
C) the unit of cost is unaffected by changes in total output. 
D) the unit of cost is affected by changes in total output.

Question 17

In the short run,after Hurricane Andrew struck the southeastern U.S. ,the price of ice:

Accepted Answer

A) rose. 
B) did not change. 
C) fell. 
D) became negative. 
A) rose. 
B) did not change. 
C) fell. 
D) became negative.

Question 18

Perfectly competitive industries are characterized by a homogeneous product.

Accepted Answer

A) True 
 B)False

Question 19

The best example of a monopolistically competitive industry is:

Accepted Answer

A) music stores. 
B) grocery stores. 
C) mobile phone service. 
D) A and B are correct. 
A) music stores. 
B) grocery stores. 
C) mobile phone service. 
D) A and B are correct.

Question 20

For firms in perfect competition,price is equal to marginal revenue at all levels of output.

Accepted Answer

A) True 
 B)False

For any an increasing-cost industry,the long-run supply curve has:

The long-run supply curve for a constant cost industry is:

Recall the example of increasing-cost industries such as sugar,at a price of 11 cents,the world supply of sugar equals the amount produced in the areas with low production costs.If the price of sugar increases what will happen in the sugar market?

Input prices fall as entry occurs in an increasing-cost industry.

A cost that has already been paid but can be recovered is a sunk cost.

What is the shape of the marginal revenue curve for a perfectly competitive firm? Why is it that way?

Assume a perfectly competitive industry is in long-run equilibrium at a price of $50.If this industry is a constant-cost industry and the demand for the product increases,long-run equilibrium will be reestablished at a price:

Assume the data backup industry,a perfectly competitive industry,is in long-run equilibrium with a market price of $3 per 10GB.If demand for data backup decreases and this industry is a decreasing-cost industry,long-run equilibrium will be reestablished at a price:

Hurricane Andrew caused the price of ice in Florida to decrease in the short run.

A firm suffering economic losses decides whether or not to produce in the short run on the basis of:

When a firm's economic profit is equal to one,the firm is at the break-even point.

In the long run,if product prices rise firms will not produce more output.

-Refer to Figure 9.7.This firm will earn an economic profit of zero if the price is:

As more firms leave an industry the market price will increase.

Recall the application on economic detective and the case of margarine prices,the margarine industry is an example of a constant-cost industry because as the total output of the industry changes the price of the key inputs to the production of margarine don't change as a result:

In the short run,after Hurricane Andrew struck the southeastern U.S. ,the price of ice:

Perfectly competitive industries are characterized by a homogeneous product.

The best example of a monopolistically competitive industry is:

For firms in perfect competition,price is equal to marginal revenue at all levels of output.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 9: Perfect Competition

For any an increasing-cost industry,the long-run supply curve has:

The long-run supply curve for a constant cost industry is:

Recall the example of increasing-cost industries such as sugar,at a price of 11 cents,the world supply of sugar equals the amount produced in the areas with low production costs.If the price of sugar increases what will happen in the sugar market?

Input prices fall as entry occurs in an increasing-cost industry.

A cost that has already been paid but can be recovered is a sunk cost.

What is the shape of the marginal revenue curve for a perfectly competitive firm? Why is it that way?

Assume a perfectly competitive industry is in long-run equilibrium at a price of $50.If this industry is a constant-cost industry and the demand for the product increases,long-run equilibrium will be reestablished at a price:

Assume the data backup industry,a perfectly competitive industry,is in long-run equilibrium with a market price of $3 per 10GB.If demand for data backup decreases and this industry is a decreasing-cost industry,long-run equilibrium will be reestablished at a price:

Hurricane Andrew caused the price of ice in Florida to decrease in the short run.

A firm suffering economic losses decides whether or not to produce in the short run on the basis of:

When a firm's economic profit is equal to one,the firm is at the break-even point.

In the long run,if product prices rise firms will not produce more output.

-Refer to Figure 9.7.This firm will earn an economic profit of zero if the price is:

As more firms leave an industry the market price will increase.

Recall the application on economic detective and the case of margarine prices,the margarine industry is an example of a constant-cost industry because as the total output of the industry changes the price of the key inputs to the production of margarine don't change as a result:

In the short run,after Hurricane Andrew struck the southeastern U.S. ,the price of ice:

Perfectly competitive industries are characterized by a homogeneous product.

The best example of a monopolistically competitive industry is:

For firms in perfect competition,price is equal to marginal revenue at all levels of output.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters