Question 1

-Refer to Table 9.1.The shutdown point for this firm is a price of:

Accepted Answer

A) $50. 
B) $60. 
C) $55. 
D) $65. 
A) $50. 
B) $60. 
C) $55. 
D) $65.

Question 2

If the price of an input decreases,each individual firm's marginal cost curve shifts ________ and the industry supply curve ________.

Accepted Answer

A) downward;shifts to the left 
B) downward;shifts to the right 
C) upward;does not change 
D) upward;shifts to the left 
A) downward;shifts to the left 
B) downward;shifts to the right 
C) upward;does not change 
D) upward;shifts to the left

Question 3

The vertical sum of the marginal cost curves (above minimum AVC)of all the firms in an industry is the long-run industry supply curve.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to Figure 9.5.If this farmer is maximizing profits,his profit will be:

Accepted Answer

A) -$24. 
B) $45. 
C) $48. 
D) $72. 
A) -$24. 
B) $45. 
C) $48. 
D) $72.

Question 5

In the form of market organization called "perfect competition," the firms tend to be ________ and the product they sell is ________.

Accepted Answer

A) large;identical 
B) small;different 
C) large;different 
D) small;identical 
A) large;identical 
B) small;different 
C) large;different 
D) small;identical

Question 6

Assume the market for beef is perfectly competitive.Beef producers are currently earning a zero economic profit.If consumers switch from beef to chicken,which of the following is most likely to occur?

Accepted Answer

A) Beef producers will now incur economic losses in both the short run and the long run. 
B) Beef producers will incur economic losses in the short run.Some producers will exit the industry until those remaining are earning a zero economic profit. 
C) Beef producers will incur economic losses in the short run.Some producers will exit the industry until those remaining are earning an economic profit. 
D) Beef producers will now earn economic profits in the short run and there will be no additional adjustments in the long run. 
A) Beef producers will now incur economic losses in both the short run and the long run. 
B) Beef producers will incur economic losses in the short run.Some producers will exit the industry until those remaining are earning a zero economic profit. 
C) Beef producers will incur economic losses in the short run.Some producers will exit the industry until those remaining are earning an economic profit. 
D) Beef producers will now earn economic profits in the short run and there will be no additional adjustments in the long run.

Question 7

-Refer to Figure 9.5.If this farmer is maximizing profits,his total revenue will be:

Accepted Answer

A) $90. 
B) $135. 
C) $180. 
D) $240. 
A) $90. 
B) $135. 
C) $180. 
D) $240.

Question 8

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.Suppose that 21st Century Pen Inc.continues to produce the same level of output and hires the same number of workers.21st Century Pen Inc.will shut down in the short run if the price falls below:

Accepted Answer

A) $3. 
B) $2. 
C) $1. 
D) $4. 
A) $3. 
B) $2. 
C) $1. 
D) $4.

Question 9

For a firm in a perfectly competitive market,at the profit maximizing level of output:

Accepted Answer

A) Price = Marginal Revenue = Marginal Cost. 
B) Price > Marginal Revenue > Marginal Cost. 
C) Price  0 and Marginal Revenue = 0. 
A) Price = Marginal Revenue = Marginal Cost. 
B) Price > Marginal Revenue > Marginal Cost. 
C) Price  0 and Marginal Revenue = 0.

Question 10

Comment on the following statement: "If a firm shuts down in the short run,it will earn zero economic profit."

Accepted Answer

The statement is false.In the

Question 11

In a monopoly,the firm specific demand curve is the same as:

Accepted Answer

A) the market supply curve. 
B) the market demand curve. 
C) the market price. 
D) none of the above. 
A) the market supply curve. 
B) the market demand curve. 
C) the market price. 
D) none of the above.

Question 12

-Refer to Figure 9.5.This farmer's fixed costs are:

Accepted Answer

A) $0. 
B) $24. 
C) $45. 
D) indeterminate unless we know the level of output the firm is producing. 
A) $0. 
B) $24. 
C) $45. 
D) indeterminate unless we know the level of output the firm is producing.

Question 13

The marginal cost curve for a perfectly competitive firm is downward sloping over the entire range of output.

Accepted Answer

A) True 
 B)False

Question 14

Marginal revenue is:

Accepted Answer

A) the ratio of total revenue to quantity. 
B) the difference between total revenue and total costs. 
C) the added revenue that a firm takes in from selling an additional unit of output. 
D) the additional profit the firm earns when it sells an additional unit of output. 
A) the ratio of total revenue to quantity. 
B) the difference between total revenue and total costs. 
C) the added revenue that a firm takes in from selling an additional unit of output. 
D) the additional profit the firm earns when it sells an additional unit of output.

Question 15

The long-run industry supply curve is positively sloped for a decreasing cost industry.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following is a good example of an increasing-cost industry?

Accepted Answer

A) apartments 
B) sugar 
C) mining 
D) all of the above 
A) apartments 
B) sugar 
C) mining 
D) all of the above

Question 17

Recall the application on the break-even price for switchgrass,a feedstock for biofuel.What are the following statements is true about the implications f in order to get some North Dakota farmers to switch their crops to switchgrass?

Accepted Answer

A) the higher the price,the larger the acreage devoted to switchgrass 
B) the lower the price,the more amount of farmers who would switch their crops to switchgrass 
C) There are no farmers willing to switch their crops to switchgrass. 
D) There is no fertile land in North Dakota to grow switchgrass. 
A) the higher the price,the larger the acreage devoted to switchgrass 
B) the lower the price,the more amount of farmers who would switch their crops to switchgrass 
C) There are no farmers willing to switch their crops to switchgrass. 
D) There is no fertile land in North Dakota to grow switchgrass.

Question 18

Recall the application about straddling the zinc cost curve,what is the shutdown price for the zinc mines?

Accepted Answer

A) The cost of mining zinc varies from one mine to another,the shutdown price varies too. 
B) The shutdown price is $1900 per ton for all zinc mines. 
C) The shutdown price is $1500 per ton for all zinc mines. 
D) none of the above 
A) The cost of mining zinc varies from one mine to another,the shutdown price varies too. 
B) The shutdown price is $1900 per ton for all zinc mines. 
C) The shutdown price is $1500 per ton for all zinc mines. 
D) none of the above

Question 19

What happens to a firm's profit-maximizing level of output if the price of the product rises? Use a graph to explain your answer.

Accepted Answer

Because the firm maximizes profit by set

Question 20

Profit-maximizing firms want to maximize the difference between:

Accepted Answer

A) total revenue and marginal cost. 
B) total revenue and total cost. 
C) marginal revenue and marginal cost. 
D) marginal revenue and average cost. 
A) total revenue and marginal cost. 
B) total revenue and total cost. 
C) marginal revenue and marginal cost. 
D) marginal revenue and average cost.

-Refer to Table 9.1.The shutdown point for this firm is a price of:

If the price of an input decreases,each individual firm's marginal cost curve shifts and the industry supply curve .

The vertical sum of the marginal cost curves (above minimum AVC)of all the firms in an industry is the long-run industry supply curve.

-Refer to Figure 9.5.If this farmer is maximizing profits,his profit will be:

In the form of market organization called "perfect competition," the firms tend to be and the product they sell is .

Assume the market for beef is perfectly competitive.Beef producers are currently earning a zero economic profit.If consumers switch from beef to chicken,which of the following is most likely to occur?

-Refer to Figure 9.5.If this farmer is maximizing profits,his total revenue will be:

For a firm in a perfectly competitive market,at the profit maximizing level of output:

Comment on the following statement: "If a firm shuts down in the short run,it will earn zero economic profit."

In a monopoly,the firm specific demand curve is the same as:

-Refer to Figure 9.5.This farmer's fixed costs are:

The marginal cost curve for a perfectly competitive firm is downward sloping over the entire range of output.

Marginal revenue is:

The long-run industry supply curve is positively sloped for a decreasing cost industry.

Which one of the following is a good example of an increasing-cost industry?

Recall the application on the break-even price for switchgrass,a feedstock for biofuel.What are the following statements is true about the implications f in order to get some North Dakota farmers to switch their crops to switchgrass?

Recall the application about straddling the zinc cost curve,what is the shutdown price for the zinc mines?

What happens to a firm's profit-maximizing level of output if the price of the product rises? Use a graph to explain your answer.

Profit-maximizing firms want to maximize the difference between:

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

-Refer to Table 9.1.The shutdown point for this firm is a price of:

If the price of an input decreases,each individual firm's marginal cost curve shifts ________ and the industry supply curve ________.

The vertical sum of the marginal cost curves (above minimum AVC)of all the firms in an industry is the long-run industry supply curve.

-Refer to Figure 9.5.If this farmer is maximizing profits,his profit will be:

In the form of market organization called "perfect competition," the firms tend to be ________ and the product they sell is ________.

Assume the market for beef is perfectly competitive.Beef producers are currently earning a zero economic profit.If consumers switch from beef to chicken,which of the following is most likely to occur?

-Refer to Figure 9.5.If this farmer is maximizing profits,his total revenue will be:

For a firm in a perfectly competitive market,at the profit maximizing level of output:

Comment on the following statement: "If a firm shuts down in the short run,it will earn zero economic profit."

In a monopoly,the firm specific demand curve is the same as:

-Refer to Figure 9.5.This farmer's fixed costs are:

The marginal cost curve for a perfectly competitive firm is downward sloping over the entire range of output.

Marginal revenue is:

The long-run industry supply curve is positively sloped for a decreasing cost industry.

Which one of the following is a good example of an increasing-cost industry?

Recall the application on the break-even price for switchgrass,a feedstock for biofuel.What are the following statements is true about the implications f in order to get some North Dakota farmers to switch their crops to switchgrass?

Recall the application about straddling the zinc cost curve,what is the shutdown price for the zinc mines?

What happens to a firm's profit-maximizing level of output if the price of the product rises? Use a graph to explain your answer.

Profit-maximizing firms want to maximize the difference between:

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

If the price of an input decreases,each individual firm's marginal cost curve shifts and the industry supply curve .

In the form of market organization called "perfect competition," the firms tend to be and the product they sell is .