Question 1

For a purely competitive firm, total revenue

Accepted Answer

A) is price times quantity sold. 
B) increases by a constant absolute amount as output expands. 
C) graphs as a straight upsloping line from the origin. 
D) has all of these characteristics. 
A) is price times quantity sold. 
B) increases by a constant absolute amount as output expands. 
C) graphs as a straight upsloping line from the origin. 
D) has all of these characteristics.

Question 2

The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a basic characteristic of pure competition?

Accepted Answer

A) considerable nonprice competition 
B) no barriers to the entry or exit of firms 
C) a standardized or homogeneous product 
D) a large number of buyers and sellers 
A) considerable nonprice competition 
B) no barriers to the entry or exit of firms 
C) a standardized or homogeneous product 
D) a large number of buyers and sellers

Question 4

(Last Word) Fixed costs for a firm are analogous to

Accepted Answer

A) the dirt that fills up the financial hole. 
B) digging a deeper financial hole by producing when prices are too low. 
C) the cost of the shovel needed to fill the financial hole. 
D) starting out in a hole that represents economic losses if the firm produces nothing. 
A) the dirt that fills up the financial hole. 
B) digging a deeper financial hole by producing when prices are too low. 
C) the cost of the shovel needed to fill the financial hole. 
D) starting out in a hole that represents economic losses if the firm produces nothing.

Question 5

Xavier produces and sells tomatoes in a purely competitive market.This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the

Accepted Answer

A) unit price. 
B) average cost. 
C) variable cost. 
D) unit profit. 
A) unit price. 
B) average cost. 
C) variable cost. 
D) unit profit.

Question 6

The accompanying table gives cost data for a firm that is selling in a purely competitive market.Which of the following tables gives the firm's short- run supply schedule?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 7

Price and marginal revenue are identical for an individual purely competitive seller.

Accepted Answer

A) True 
 B)False

Question 8

A purely competitive firm currently producing 20 units of output earns marginal revenues of $12 from each extra unit of output it sells.If it sells 30 units, then its total revenues would be

Accepted Answer

A) $120. 
B) $240. 
C) $360. 
D) indeterminate based on the given information. 
A) $120. 
B) $240. 
C) $360. 
D) indeterminate based on the given information.

Question 9

Which of the following statements applies to a purely competitive producer?

Accepted Answer

A) It will not advertise its product. 
B) In long-run equilibrium, it will earn an economic profit. 
C) Its product will have a brand name that elicits customer loyalty. 
D) Its product is slightly different from those of its competitors. 
A) It will not advertise its product. 
B) In long-run equilibrium, it will earn an economic profit. 
C) Its product will have a brand name that elicits customer loyalty. 
D) Its product is slightly different from those of its competitors.

Question 10

Local electric or gas utility companies mostly operate in which market structure?

Accepted Answer

A) monopolistic competition 
B) pure competition 
C) pure monopoly 
D) oligopoly 
A) monopolistic competition 
B) pure competition 
C) pure monopoly 
D) oligopoly

Question 11

In pure competition, the industry demand curve is infinitely price elastic.

Accepted Answer

A) True 
 B)False

Question 12

On a per-unit basis, economic profit can be determined as the difference between

Accepted Answer

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

Question 13

The short-run supply curve for a competitive firm is the

Accepted Answer

A) entire MC curve. 
B) segment of the MC curve lying below the AVC curve. 
C) segment of the MC curve lying above the AVC curve. 
D) segment of the AVC curve lying to the right of the MC curve. 
A) entire MC curve. 
B) segment of the MC curve lying below the AVC curve. 
C) segment of the MC curve lying above the AVC curve. 
D) segment of the AVC curve lying to the right of the MC curve.

Question 14

The term imperfect competition refers to every market structure besides pure competition.

Accepted Answer

A) True 
 B)False

Question 15

For a purely competitive seller, price equals

Accepted Answer

A) average revenue. 
B) marginal revenue. 
C) total revenue divided by output. 
D) all of these. 
A) average revenue. 
B) marginal revenue. 
C) total revenue divided by output. 
D) all of these.

Question 16

Average revenue and marginal revenue are equal at each output level in

Accepted Answer

A) pure competition. 
B) monopolistic competition. 
C) monopoly. 
D) oligopoly. 
A) pure competition. 
B) monopolistic competition. 
C) monopoly. 
D) oligopoly.

Question 17

If a purely competitive firm is producing a level of output where the marginal revenue is less than the marginal cost, then its profits must be negative.

Accepted Answer

A) True 
 B)False

Question 18

If a firm has at least some control over the price of its product, then the firm cannot be in which market model?

Accepted Answer

A) oligopoly 
B) pure monopoly 
C) pure competition 
D) monopolistic competition 
A) oligopoly 
B) pure monopoly 
C) pure competition 
D) monopolistic competition

Question 19

The accompanying table gives cost data for a firm that is selling in a purely competitive market.If the market price for the firm's product is $32, the competitive firm will produce

Accepted Answer

A) 8 units at an economic profit of $16. 
B) 6 units at an economic profit of $7.98. 
C) 10 units at an economic profit of $4. 
D) 7 units at an economic profit of $41.50. 
A) 8 units at an economic profit of $16. 
B) 6 units at an economic profit of $7.98. 
C) 10 units at an economic profit of $4. 
D) 7 units at an economic profit of $41.50.

Question 20

In the short run, a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost.

Accepted Answer

A) True 
 B)False

Exam 10: Pure Competition in the Short Run

For a purely competitive firm, total revenue

The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.

Which of the following is not a basic characteristic of pure competition?

(Last Word) Fixed costs for a firm are analogous to

Xavier produces and sells tomatoes in a purely competitive market.This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the

The accompanying table gives cost data for a firm that is selling in a purely competitive market.Which of the following tables gives the firm's short- run supply schedule?

Price and marginal revenue are identical for an individual purely competitive seller.

A purely competitive firm currently producing 20 units of output earns marginal revenues of $12 from each extra unit of output it sells.If it sells 30 units, then its total revenues would be

Which of the following statements applies to a purely competitive producer?

Local electric or gas utility companies mostly operate in which market structure?

In pure competition, the industry demand curve is infinitely price elastic.

On a per-unit basis, economic profit can be determined as the difference between

The short-run supply curve for a competitive firm is the

The term imperfect competition refers to every market structure besides pure competition.

For a purely competitive seller, price equals

Average revenue and marginal revenue are equal at each output level in

If a purely competitive firm is producing a level of output where the marginal revenue is less than the marginal cost, then its profits must be negative.

If a firm has at least some control over the price of its product, then the firm cannot be in which market model?

The accompanying table gives cost data for a firm that is selling in a purely competitive market.If the market price for the firm's product is $32, the competitive firm will produce

In the short run, a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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