Question 1

In the short run, perfectly competitive firms ________ but in the long run, perfectly competitive firms ________.

Accepted Answer

A)  can incur an economic loss; incur an economic loss 
B)  can incur economic losses; make an economic profit 
C)  must make an economic profit; make an economic profit 
D)  can incur an economic loss; make zero economic profit 
A)  can incur an economic loss; incur an economic loss 
B)  can incur economic losses; make an economic profit 
C)  must make an economic profit; make an economic profit 
D)  can incur an economic loss; make zero economic profit

Question 2

-The figure above shows the marginal revenue and costs of a perfectly competitive firm. When the firm produces 170 units

Accepted Answer

A)  marginal cost is less than marginal revenue. 
B)  marginal revenue equals marginal cost. 
C)  total revenue is less than total cost. 
D)  total revenue equals total cost. 
A)  marginal cost is less than marginal revenue. 
B)  marginal revenue equals marginal cost. 
C)  total revenue is less than total cost. 
D)  total revenue equals total cost.

Question 3

In the short run, a perfectly competitive firm's economic profits

Accepted Answer

A)  must equal zero, that is, the firm earns a normal profit. 
B)  must be positive. 
C)  might be positive, negative (an economic loss), or zero (a normal profit). 
D)  must be negative, that is the firm must incur an economic loss. 
A)  must equal zero, that is, the firm earns a normal profit. 
B)  must be positive. 
C)  might be positive, negative (an economic loss), or zero (a normal profit). 
D)  must be negative, that is the firm must incur an economic loss.

Question 4

Which of the following is TRUE regarding perfect competition? I. The firms are price takers.
II) Marginal revenue equals the price of the product.
III) Established firms have no advantage over new firms.

Accepted Answer

A)  I and II 
B)  II and III 
C)  I, II and III 
D)  I only 
A)  I and II 
B)  II and III 
C)  I, II and III 
D)  I only

Question 5

-The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce ________ units of output and the price will be ________ for a unit.

Accepted Answer

A)  30; $40 
B)  30; $30 
C)  20; $40 
D)  20; $30 
A)  30; $40 
B)  30; $30 
C)  20; $40 
D)  20; $30

Question 6

-The figure above shows a perfectly competitive firm. The firm will shut down in the short run if total fixed costs

Accepted Answer

A)  are between $201 and $400. 
B)  exceed $401. 
C)  are less than $200. 
D)  exceed total costs. 
A)  are between $201 and $400. 
B)  exceed $401. 
C)  are less than $200. 
D)  exceed total costs.

Question 7

-In the above figure, if the price is P1 and the firm produces Q2, it is

Accepted Answer

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

In the short run, perfectly competitive firms but in the long run, perfectly competitive firms .

-The figure above shows the marginal revenue and costs of a perfectly competitive firm. When the firm produces 170 units

In the short run, a perfectly competitive firm's economic profits

Which of the following is TRUE regarding perfect competition? I. The firms are price takers. II) Marginal revenue equals the price of the product. III) Established firms have no advantage over new firms.

-The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce units of output and the price will be for a unit.

-The figure above shows a perfectly competitive firm. The firm will shut down in the short run if total fixed costs

-In the above figure, if the price is P₁and the firm produces Q_2, it is

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

In the short run, perfectly competitive firms ________ but in the long run, perfectly competitive firms ________.

-The figure above shows the marginal revenue and costs of a perfectly competitive firm. When the firm produces 170 units

In the short run, a perfectly competitive firm's economic profits

Which of the following is TRUE regarding perfect competition? I. The firms are price takers. II) Marginal revenue equals the price of the product. III) Established firms have no advantage over new firms.

-The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce ________ units of output and the price will be ________ for a unit.

-The figure above shows a perfectly competitive firm. The firm will shut down in the short run if total fixed costs

-In the above figure, if the price is P1 and the firm produces Q2, it is

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

In the short run, perfectly competitive firms but in the long run, perfectly competitive firms .

-The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce units of output and the price will be for a unit.

-In the above figure, if the price is P₁and the firm produces Q_2, it is