Question 1

-In the above figure, by increasing its output from Q2 to Q3, the firm

Accepted Answer

A)  reduces its marginal revenue. 
B)  increases its marginal revenue. 
C)  decreases its profit. 
D)  increases its profit. 
A)  reduces its marginal revenue. 
B)  increases its marginal revenue. 
C)  decreases its profit. 
D)  increases its profit.

Question 2

-The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm

Accepted Answer

A)  is a price taker. 
B)  faces constant returns to scale. 
C)  wants to maximize its profits. 
D)  has perfect information. 
A)  is a price taker. 
B)  faces constant returns to scale. 
C)  wants to maximize its profits. 
D)  has perfect information.

Question 3

If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will

Accepted Answer

A)  have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price. 
B)  have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line. 
C)  decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward. 
D)  reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward. 
A)  have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price. 
B)  have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line. 
C)  decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward. 
D)  reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward.

Question 4

-The figure illustrates the short-run costs of Paul's Picture Frames Inc. The picture frame market is perfectly competitive and the market price is $30 a frame. Paul produces ________ frames each week, makes ________ of total revenue, and makes zero ________ profit.

Accepted Answer

A)  200; $4,000; economic 
B)  300; $9,000; normal 
C)  200; $4,000; normal 
D)  300; $9,000; economic 
A)  200; $4,000; economic 
B)  300; $9,000; normal 
C)  200; $4,000; normal 
D)  300; $9,000; economic

Question 5

In the long run, perfectly competitive firms earn just enough revenue to

Accepted Answer

A)  pay all fixed costs. 
B)  pay all accounting costs. 
C)  pay all opportunity costs. 
D)  attract entry. 
A)  pay all fixed costs. 
B)  pay all accounting costs. 
C)  pay all opportunity costs. 
D)  attract entry.

Question 6

Which of the following best describes the short-run supply curve for an individual perfectly competitive firm?

Accepted Answer

A)  It is the firm's marginal cost curve. 
B)  It is the upward-sloping part of the firm's marginal cost curve. 
C)  It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. 
D)  It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost. 
A)  It is the firm's marginal cost curve. 
B)  It is the upward-sloping part of the firm's marginal cost curve. 
C)  It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. 
D)  It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.

Question 7

In the short run, a perfectly competitive firm

Accepted Answer

A)  cannot shut down. 
B)  must make zero economic profit. 
C)  can make an economic profit, incur an economic loss, or make zero economic profit. 
D)  will not incur an economic loss if it shuts down. 
A)  cannot shut down. 
B)  must make zero economic profit. 
C)  can make an economic profit, incur an economic loss, or make zero economic profit. 
D)  will not incur an economic loss if it shuts down.

-In the above figure, by increasing its output from Q₂ to Q₃, the firm

-The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm

If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will

-The figure illustrates the short-run costs of Paul's Picture Frames Inc. The picture frame market is perfectly competitive and the market price is $30 a frame. Paul produces frames each week, makes of total revenue, and makes zero profit.

In the long run, perfectly competitive firms earn just enough revenue to

Which of the following best describes the short-run supply curve for an individual perfectly competitive firm?

In the short run, a perfectly competitive firm

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

Organizing Production

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

Exam 12: Perfect Competition

-In the above figure, by increasing its output from Q2 to Q3, the firm

-The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm

If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will

-The figure illustrates the short-run costs of Paul's Picture Frames Inc. The picture frame market is perfectly competitive and the market price is $30 a frame. Paul produces ________ frames each week, makes ________ of total revenue, and makes zero ________ profit.

In the long run, perfectly competitive firms earn just enough revenue to

Which of the following best describes the short-run supply curve for an individual perfectly competitive firm?

In the short run, a perfectly competitive firm

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

Organizing Production

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

-In the above figure, by increasing its output from Q₂ to Q₃, the firm

-The figure illustrates the short-run costs of Paul's Picture Frames Inc. The picture frame market is perfectly competitive and the market price is $30 a frame. Paul produces frames each week, makes of total revenue, and makes zero profit.