Question 1

A firm's shutdown point is the quantity and price at which the firm's total revenue just equals its

Accepted Answer

A)  total cost. 
B)  total variable cost. 
C)  total fixed cost. 
D)  marginal cost. 
A)  total cost. 
B)  total variable cost. 
C)  total fixed cost. 
D)  marginal cost.

Question 2

The short-run supply curve for a perfectly competitive firm is its marginal cost curve above the minimum point on the

Accepted Answer

A)  average fixed cost curve. 
B)  average variable cost curve. 
C)  average total cost curve. 
D)  demand curve. 
A)  average fixed cost curve. 
B)  average variable cost curve. 
C)  average total cost curve. 
D)  demand curve.

Question 3

-The figure above shows the costs for the typical grower in the perfectly competitive turnip market. Currently, the price is $1,000 for a ton of turnips. In the long run, the market supply of turnips will

Accepted Answer

A)  decrease and the price of a ton of turnips will fall to $600. 
B)  increase and the turnip grower's economic profit will increase. 
C)  increase and the turnip grower's economic profit will decrease. 
D)  decrease and the price of a ton of turnips will rise to $1,200. 
A)  decrease and the price of a ton of turnips will fall to $600. 
B)  increase and the turnip grower's economic profit will increase. 
C)  increase and the turnip grower's economic profit will decrease. 
D)  decrease and the price of a ton of turnips will rise to $1,200.

Question 4

-Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip

Accepted Answer

A)  makes an economic profit and should stay open in the short run. 
B)  makes an economic profit, but should shut down in the short run. 
C)  incurs an economic loss, but should stay open in the short run. 
D)  incurs an economic loss and should shut down in the short run. 
A)  makes an economic profit and should stay open in the short run. 
B)  makes an economic profit, but should shut down in the short run. 
C)  incurs an economic loss, but should stay open in the short run. 
D)  incurs an economic loss and should shut down in the short run.

Question 5

-The figure above shows a perfectly competitive firm. The figure shows a firm

Accepted Answer

A)  in the short run. 
B)  in the long run. 
C)  at its shutdown point. 
D)  Both answers A and C are correct. 
A)  in the short run. 
B)  in the long run. 
C)  at its shutdown point. 
D)  Both answers A and C are correct.

Question 6

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?

Accepted Answer

A)  zero 
B)  between 0 and $0.50 per hour 
C)  between $0.51 and $1.00 per hour 
D)  more than $1.00 per hour 
A)  zero 
B)  between 0 and $0.50 per hour 
C)  between $0.51 and $1.00 per hour 
D)  more than $1.00 per hour

Question 7

The goal of a perfectly competitive firm is to maximize its

Accepted Answer

A)  normal profit. 
B)  revenue. 
C)  output. 
D)  economic profit. 
A)  normal profit. 
B)  revenue. 
C)  output. 
D)  economic profit.

Question 8

A firm is producing the profit-maximizing amount of output when it is producing where its ________ curve intersects its ________ curve.

Accepted Answer

A)  MC; MR 
B)  MC; AVC 
C)  MC; ATC 
D)  MC; TR 
A)  MC; MR 
B)  MC; AVC 
C)  MC; ATC 
D)  MC; TR

Question 9

In perfect competition, the product of a single firm

Accepted Answer

A)  has many perfect substitutes produced by other firms. 
B)  has many perfect complements produced by other firms. 
C)  is sold under many differing brand names. 
D)  is sold to different customers at different prices. 
A)  has many perfect substitutes produced by other firms. 
B)  has many perfect complements produced by other firms. 
C)  is sold under many differing brand names. 
D)  is sold to different customers at different prices.

Question 10

If the minimum efficient scale of a firm is small relative to the demand for the good, then

Accepted Answer

A)  many small firms can compete in the market. 
B)  several large firms will enter the market thereby reducing competition. 
C)  there will be no economic profits for any small firms, so no new firms will ever enter the market. 
D)  the firms already in the market have lower average total cost than any new firm entering the market. 
A)  many small firms can compete in the market. 
B)  several large firms will enter the market thereby reducing competition. 
C)  there will be no economic profits for any small firms, so no new firms will ever enter the market. 
D)  the firms already in the market have lower average total cost than any new firm entering the market.

Question 11

A perfectly competitive firm will operate and incur an economic loss in the short run if

Accepted Answer

A)  the loss is smaller than its total fixed costs. 
B)  it knows it can recoup the loss in the long run. 
C)  shareholders do not know about the loss. 
D)  the loss can offset future profits. 
A)  the loss is smaller than its total fixed costs. 
B)  it knows it can recoup the loss in the long run. 
C)  shareholders do not know about the loss. 
D)  the loss can offset future profits.

Question 12

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. The current market price is 4 cents per page. With no change in demand and technology, in the long run, the price will

Accepted Answer

A)  remain unchanged. 
B)  rise to 5 cents per page. 
C)  fall to 2 cents per page. 
D)  fall to 1 cent per page. 
A)  remain unchanged. 
B)  rise to 5 cents per page. 
C)  fall to 2 cents per page. 
D)  fall to 1 cent per page.

Question 13

-The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,000 for a ton of turnips, the firm is

Accepted Answer

A)  making an economic profit. 
B)  making zero economic profit. 
C)  incurring an economic loss. 
D)  More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss. 
A)  making an economic profit. 
B)  making zero economic profit. 
C)  incurring an economic loss. 
D)  More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss.

Question 14

-The figure above shows depicts the marginal revenue and costs of a perfectly competitive firm. The price the firm charges is

Accepted Answer

A)  $4 per unit. 
B)  $8 per unit. 
C)  $16 per unit. 
D)  None of the above answers is correct. 
A)  $4 per unit. 
B)  $8 per unit. 
C)  $16 per unit. 
D)  None of the above answers is correct.

Question 15

Fresno County, California is the largest agricultural producing county in the country and almonds are an important crop with more than 99,000 acres harvested. Each acre produces about a ton of almonds and sold at a price of $4300 a ton. The Sagardia Brothers grew 600 acres of almonds. What would happen if the Sagardia Brothers priced their almonds at $4000 a ton?

Accepted Answer

A)  Profits will be higher than when they sell them at the higher price. 
B)  They will sell the same amount of almonds, but profits will be lower. 
C)  The quantity sold will be higher. 
D)  They will not sell any almonds. 
A)  Profits will be higher than when they sell them at the higher price. 
B)  They will sell the same amount of almonds, but profits will be lower. 
C)  The quantity sold will be higher. 
D)  They will not sell any almonds.

Question 16

A perfectly competitive market is in long-run equilibrium. Then demand decreases. The decrease in demand leads to

Accepted Answer

A)  a rise in the price in the short run. 
B)  the firms' incurring an economic loss in the short run. 
C)  firms entering the market in the long run. 
D)  none of the above 
A)  a rise in the price in the short run. 
B)  the firms' incurring an economic loss in the short run. 
C)  firms entering the market in the long run. 
D)  none of the above

Question 17

-The table above shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is

Accepted Answer

A)  $1750. 
B)  $200. 
C)  $300. 
D)  $500. 
A)  $1750. 
B)  $200. 
C)  $300. 
D)  $500.

Question 18

A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will

Accepted Answer

A)  rise and its total variable cost will rise even more. 
B)  rise and its total variable cost will rise, but not by as much. 
C)  fall but its total variable cost will rise. 
D)  fall and its total variable cost will fall, but not by as much. 
A)  rise and its total variable cost will rise even more. 
B)  rise and its total variable cost will rise, but not by as much. 
C)  fall but its total variable cost will rise. 
D)  fall and its total variable cost will fall, but not by as much.

Question 19

A perfectly competitive firm's marginal revenue

Accepted Answer

A)  increases as the firm produces more output. 
B)  decreases as the firm produces more output. 
C)  is less than the market price of its product. 
D)  equals the market price of its product. 
A)  increases as the firm produces more output. 
B)  decreases as the firm produces more output. 
C)  is less than the market price of its product. 
D)  equals the market price of its product.

Question 20

-The above diagram shows the cost curves for a perfectly competitive wheat farmer. At what price(s) does the wheat farmer make an economic profit? Make zero economic profit? Incur an economic loss? How many bushels of wheat does the farmer produce if the price is $3 per bushel? If the price is $0.50 per bushel?

Accepted Answer

At any price that exceeds the minimum of

A firm's shutdown point is the quantity and price at which the firm's total revenue just equals its

The short-run supply curve for a perfectly competitive firm is its marginal cost curve above the minimum point on the

-The figure above shows the costs for the typical grower in the perfectly competitive turnip market. Currently, the price is $1,000 for a ton of turnips. In the long run, the market supply of turnips will

-Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip

-The figure above shows a perfectly competitive firm. The figure shows a firm

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?

The goal of a perfectly competitive firm is to maximize its

A firm is producing the profit-maximizing amount of output when it is producing where its curve intersects its curve.

In perfect competition, the product of a single firm

If the minimum efficient scale of a firm is small relative to the demand for the good, then

A perfectly competitive firm will operate and incur an economic loss in the short run if

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. The current market price is 4 cents per page. With no change in demand and technology, in the long run, the price will

-The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,000 for a ton of turnips, the firm is

-The figure above shows depicts the marginal revenue and costs of a perfectly competitive firm. The price the firm charges is

A perfectly competitive market is in long-run equilibrium. Then demand decreases. The decrease in demand leads to

-The table above shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is

A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will

A perfectly competitive firm's marginal revenue

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 12: Perfect Competition

A firm's shutdown point is the quantity and price at which the firm's total revenue just equals its

The short-run supply curve for a perfectly competitive firm is its marginal cost curve above the minimum point on the

-The figure above shows the costs for the typical grower in the perfectly competitive turnip market. Currently, the price is $1,000 for a ton of turnips. In the long run, the market supply of turnips will

-Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip

-The figure above shows a perfectly competitive firm. The figure shows a firm

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?

The goal of a perfectly competitive firm is to maximize its

A firm is producing the profit-maximizing amount of output when it is producing where its ________ curve intersects its ________ curve.

In perfect competition, the product of a single firm

If the minimum efficient scale of a firm is small relative to the demand for the good, then

A perfectly competitive firm will operate and incur an economic loss in the short run if

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. The current market price is 4 cents per page. With no change in demand and technology, in the long run, the price will

-The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,000 for a ton of turnips, the firm is

-The figure above shows depicts the marginal revenue and costs of a perfectly competitive firm. The price the firm charges is

A perfectly competitive market is in long-run equilibrium. Then demand decreases. The decrease in demand leads to

-The table above shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is

A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will

A perfectly competitive firm's marginal revenue

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

A firm is producing the profit-maximizing amount of output when it is producing where its curve intersects its curve.