Question 1

A monopolistic competitive market has the following characteristics EXCEPT:

Accepted Answer

A) no barriers to entry. 
B) the product is homogeneous. 
C) many sellers. 
D) relatively elastic demand. 
A) no barriers to entry. 
B) the product is homogeneous. 
C) many sellers. 
D) relatively elastic demand.

Question 2

List the three conditions that must be met when a perfectly competitive industry is in long-run equilibrium.

Accepted Answer

The quantity demanded must equal the qua

Question 3

Why would a firm be willing to operate at a loss?

Accepted Answer

A firm would be willing to operate at a

Question 4

-Refer to Figure 9.1.A farmer produces 100 bushels of corn and sells each bushel at $5.The cost of producing each unit bushel is $2.This farmer's total revenue is:

Accepted Answer

A) $20. 
B) $200. 
C) $300. 
D) $500. 
A) $20. 
B) $200. 
C) $300. 
D) $500.

Question 5

-Refer to Figure 9.5.This farmer would earn zero economic profit if price was:

Accepted Answer

A) $7. 
B) $9. 
C) $10. 
D) $11. 
A) $7. 
B) $9. 
C) $10. 
D) $11.

Question 6

In an increasing-cost industry,the average cost of production increases as the total output increases due to:

Accepted Answer

A) increasing input prices. 
B) price equals marginal cost. 
C) increasing in demand for outputs. 
D) all of the above. 
A) increasing input prices. 
B) price equals marginal cost. 
C) increasing in demand for outputs. 
D) all of the above.

Question 7

In all four types of markets a firm' s main objective is to:

Accepted Answer

A) maximize revenue. 
B) maximize output. 
C) maximize economic profit. 
D) minimize fixed cost. 
A) maximize revenue. 
B) maximize output. 
C) maximize economic profit. 
D) minimize fixed cost.

Question 8

If a firm shuts down in the short run,will the firm have zero costs? Why or why not?

Accepted Answer

No,the fir

Question 9

In a monopoly firms are called "price makers" because:

Accepted Answer

A) they are so small that they must accept any reasonable offer from consumers for their outputs. 
B) they are able to affect the market price. 
C) they are unable to sell their products at any price above the market price. 
D) the firms are large relative to the size of the industry. 
A) they are so small that they must accept any reasonable offer from consumers for their outputs. 
B) they are able to affect the market price. 
C) they are unable to sell their products at any price above the market price. 
D) the firms are large relative to the size of the industry.

Question 10

Sunk costs are important to consider when determining to shut down or to operate a business.

Accepted Answer

A) True 
 B)False

Question 11

The long-run supply curve for a increasing cost industry is downward sloping.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to Figure 9.5.If this farmer is maximizing his profits,his total variable cost is:

Accepted Answer

A) $24. 
B) $42. 
C) $108. 
D) $255. 
A) $24. 
B) $42. 
C) $108. 
D) $255.

Question 13

The short-run industry supply curve for a perfectly competitive industry is the:

Accepted Answer

A) horizontal sum of the individual firms' marginal cost curves above short run average variable cost. 
B) vertical sum of the individual firms' marginal cost curves above short run average variable cost. 
C) horizontal sum of the individual firms' marginal cost curves above short run average total cost. 
D) vertical sum of the individual firms' marginal cost curves above short run average total cost. 
A) horizontal sum of the individual firms' marginal cost curves above short run average variable cost. 
B) vertical sum of the individual firms' marginal cost curves above short run average variable cost. 
C) horizontal sum of the individual firms' marginal cost curves above short run average total cost. 
D) vertical sum of the individual firms' marginal cost curves above short run average total cost.

Question 14

To maximize total profits,a firm should produce at the level of output at which there is the greatest difference between marginal revenue and marginal cost.

Accepted Answer

A) True 
 B)False

Question 15

-Refer to Figure 9.2.If Buffy gives 17 perms per day,her daily profit is:

Accepted Answer

A) $3. 
B) $10. 
C) $45. 
D) $51. 
A) $3. 
B) $10. 
C) $45. 
D) $51.

Question 16

In 1992,Hurricane Andrew caused the price of ice in Florida to increase in the long run.

Accepted Answer

A) True 
 B)False

Question 17

What does it mean for a firm to be suffering an economic loss? Does this imply that the firm is incurring a loss in the accounting sense? Explain.

Accepted Answer

When a firm is suffering an economic los

Question 18

The best example of an oligopolistic industry is:

Accepted Answer

A) wheat. 
B) restaurants. 
C) automobiles. 
D) all of the above. 
A) wheat. 
B) restaurants. 
C) automobiles. 
D) all of the above.

Question 19

Recall the application about short-run supply curve for cargo.Why do the shipping costs rise as shipping volume increases?

Accepted Answer

A) Docks become more crowded. 
B) Fewer ships travel. 
C) Docking fees go up. 
D) Ships travel faster and use more fuel. 
A) Docks become more crowded. 
B) Fewer ships travel. 
C) Docking fees go up. 
D) Ships travel faster and use more fuel.

Question 20

At the break-even point,economic profit is zero,pice is equal to the average total cost.

Accepted Answer

A) True 
 B)False

A monopolistic competitive market has the following characteristics EXCEPT:

List the three conditions that must be met when a perfectly competitive industry is in long-run equilibrium.

Why would a firm be willing to operate at a loss?

-Refer to Figure 9.1.A farmer produces 100 bushels of corn and sells each bushel at $5.The cost of producing each unit bushel is $2.This farmer's total revenue is:

-Refer to Figure 9.5.This farmer would earn zero economic profit if price was:

In an increasing-cost industry,the average cost of production increases as the total output increases due to:

In all four types of markets a firm' s main objective is to:

If a firm shuts down in the short run,will the firm have zero costs? Why or why not?

In a monopoly firms are called "price makers" because:

Sunk costs are important to consider when determining to shut down or to operate a business.

The long-run supply curve for a increasing cost industry is downward sloping.

-Refer to Figure 9.5.If this farmer is maximizing his profits,his total variable cost is:

The short-run industry supply curve for a perfectly competitive industry is the:

To maximize total profits,a firm should produce at the level of output at which there is the greatest difference between marginal revenue and marginal cost.

-Refer to Figure 9.2.If Buffy gives 17 perms per day,her daily profit is:

In 1992,Hurricane Andrew caused the price of ice in Florida to increase in the long run.

What does it mean for a firm to be suffering an economic loss? Does this imply that the firm is incurring a loss in the accounting sense? Explain.

The best example of an oligopolistic industry is:

Recall the application about short-run supply curve for cargo.Why do the shipping costs rise as shipping volume increases?

At the break-even point,economic profit is zero,pice is equal to the average total cost.

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

A monopolistic competitive market has the following characteristics EXCEPT:

List the three conditions that must be met when a perfectly competitive industry is in long-run equilibrium.

Why would a firm be willing to operate at a loss?

-Refer to Figure 9.1.A farmer produces 100 bushels of corn and sells each bushel at $5.The cost of producing each unit bushel is $2.This farmer's total revenue is:

-Refer to Figure 9.5.This farmer would earn zero economic profit if price was:

In an increasing-cost industry,the average cost of production increases as the total output increases due to:

In all four types of markets a firm' s main objective is to:

If a firm shuts down in the short run,will the firm have zero costs? Why or why not?

In a monopoly firms are called "price makers" because:

Sunk costs are important to consider when determining to shut down or to operate a business.

The long-run supply curve for a increasing cost industry is downward sloping.

-Refer to Figure 9.5.If this farmer is maximizing his profits,his total variable cost is:

The short-run industry supply curve for a perfectly competitive industry is the:

To maximize total profits,a firm should produce at the level of output at which there is the greatest difference between marginal revenue and marginal cost.

-Refer to Figure 9.2.If Buffy gives 17 perms per day,her daily profit is:

In 1992,Hurricane Andrew caused the price of ice in Florida to increase in the long run.

What does it mean for a firm to be suffering an economic loss? Does this imply that the firm is incurring a loss in the accounting sense? Explain.

The best example of an oligopolistic industry is:

Recall the application about short-run supply curve for cargo.Why do the shipping costs rise as shipping volume increases?

At the break-even point,economic profit is zero,pice is equal to the average total cost.

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