Question 1

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

Accepted Answer

A)  perfect competition 
B)  only monopoly 
C)  oligopoly 
D)  only monopolistic competition 
E)  either monopoly or monopolistic competition 
A)  perfect competition 
B)  only monopoly 
C)  oligopoly 
D)  only monopolistic competition 
E)  either monopoly or monopolistic competition

Question 2

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

Accepted Answer

If a firm's economic loss is greater whe

Question 3

If perfectly competitive firms are maximizing their profit and are making an economic profit,the market ________ in a short-run equilibrium and ________ in a long-run equilibrium.

Accepted Answer

A)  is; is 
B)  is; is not 
C)  is not; is 
D)  is not; is not 
E)  is; might be 
A)  is; is 
B)  is; is not 
C)  is not; is 
D)  is not; is not 
E)  is; might be

Question 4

The above figure shows some a firm's cost curves and its marginal revenue curve.
-The price for the shutdown point is ________.

Accepted Answer

A)  $5.14 
B)  between $3.01 and $5.13 
C)  $3.00 
D)  between $0 and $2.99 
E)  greater than $5.15 
A)  $5.14 
B)  between $3.01 and $5.13 
C)  $3.00 
D)  between $0 and $2.99 
E)  greater than $5.15

Question 5

-The above figure illustrates a perfectly competitive firm.Curve A represents the

Accepted Answer

A)  MR curve. 
B)  ATC curve. 
C)  MC curve. 
D)  AVC curve. 
E)  AFC curve. 
A)  MR curve. 
B)  ATC curve. 
C)  MC curve. 
D)  AVC curve. 
E)  AFC curve.

Question 6

The characteristics that describe a perfectly competitive industry include

Accepted Answer

A)  many firms selling an identical product. 
B)  one firm selling to many buyers. 
C)  many firms selling a slightly differentiated product. 
D)  a few firms selling to many buyers. 
E)  None of the above answers is correct. 
A)  many firms selling an identical product. 
B)  one firm selling to many buyers. 
C)  many firms selling a slightly differentiated product. 
D)  a few firms selling to many buyers. 
E)  None of the above answers is correct.

Question 7

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

Accepted Answer

A)  an increase in market supply. 
B)  a decrease in market supply. 
C)  an increase in market demand. 
D)  a decrease in market demand. 
E)  a decrease in both the market supply and the market demand. 
A)  an increase in market supply. 
B)  a decrease in market supply. 
C)  an increase in market demand. 
D)  a decrease in market demand. 
E)  a decrease in both the market supply and the market demand.

Question 8

A perfectly competitive firm is a price taker because

Accepted Answer

A)  many other firms produce the same product. 
B)  only one firm produces the product. 
C)  many firms produce a slightly differentiated product. 
D)  a few firms compete. 
E)  it faces a vertical demand curve. 
A)  many other firms produce the same product. 
B)  only one firm produces the product. 
C)  many firms produce a slightly differentiated product. 
D)  a few firms compete. 
E)  it faces a vertical demand curve.

Question 9

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

Accepted Answer

A)  decrease, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market. 
B)  decrease, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry. 
C)  increase, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market. 
D)  increase, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry. 
E)  decrease, firms that do not use the new technology will make an economic profit, and in the long run new firms will enter the market. 
A)  decrease, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market. 
B)  decrease, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry. 
C)  increase, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market. 
D)  increase, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry. 
E)  decrease, firms that do not use the new technology will make an economic profit, and in the long run new firms will enter the market.

Question 10

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

Accepted Answer

The demand curve faced by a perfectly co

Question 11

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  zero compared to 
E)  not comparable to 
A)  greater than 
B)  less than 
C)  equal to 
D)  zero compared to 
E)  not comparable to

Question 12

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

Accepted Answer

A)  a monopoly. 
B)  an oligopoly. 
C)  perfectly competitive. 
D)  monopolistically competitive. 
E)  Both answers C and D can be correct. 
A)  a monopoly. 
B)  an oligopoly. 
C)  perfectly competitive. 
D)  monopolistically competitive. 
E)  Both answers C and D can be correct.

Question 13

When new firms enter the perfectly competitive Miami bagel market,the market

Accepted Answer

A)  supply curve shifts leftward. 
B)  supply curve does not change. 
C)  demand curve shifts rightward. 
D)  supply curve shifts rightward. 
E)  demand curve shifts leftward. 
A)  supply curve shifts leftward. 
B)  supply curve does not change. 
C)  demand curve shifts rightward. 
D)  supply curve shifts rightward. 
E)  demand curve shifts leftward.

Question 14

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

Accepted Answer

A)  will raise its price to increase its economic profit. 
B)  will lower its price to increase its economic profit. 
C)  is making an economic profit. 
D)  is incurring an economic loss. 
E)  is making zero economic profit. 
A)  will raise its price to increase its economic profit. 
B)  will lower its price to increase its economic profit. 
C)  is making an economic profit. 
D)  is incurring an economic loss. 
E)  is making zero economic profit.

Question 15

-The above diagram shows the cost curves for a perfectly competitive wheat farmer.At what price does the wheat farmer shut down?

Accepted Answer

The wheat farmer shuts down if

Question 16

Perfect competition is characterized by all of the following EXCEPT

Accepted Answer

A)  a large number of buyers and sellers. 
B)  no restrictions on entry into or exit from the industry. 
C)  considerable advertising by individual firms. 
D)  buyers and sellers are well informed about prices. 
E)  firms produce an identical product. 
A)  a large number of buyers and sellers. 
B)  no restrictions on entry into or exit from the industry. 
C)  considerable advertising by individual firms. 
D)  buyers and sellers are well informed about prices. 
E)  firms produce an identical product.

Question 17

In which of the following market types do all firms sell products so identical that buyers do not care from which firm they buy?

Accepted Answer

A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  perfect competition and monopolistic competition 
A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  perfect competition and monopolistic competition

Question 18

A large number of sellers all selling an identical product implies which of the following?

Accepted Answer

A)  market chaos 
B)  the inability of any seller to change the price of the product 
C)  large losses incurred by all sellers 
D)  horizontal market supply curves 
E)  vertical market supply curves 
A)  market chaos 
B)  the inability of any seller to change the price of the product 
C)  large losses incurred by all sellers 
D)  horizontal market supply curves 
E)  vertical market supply curves

Question 19

A requirement of perfect competition is that
i.many firms sell an identical product to many buyers.
ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms.
iii.sellers and buyers are well informed about prices.

Accepted Answer

A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 20

If firms in a perfectly competitive industry are earning an economic profit,then in the ________,firms will ________ the industry.

Accepted Answer

A)  short run; enter 
B)  long run; enter 
C)  short run; exit 
D)  long run; exit 
E)  More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry. 
A)  short run; enter 
B)  long run; enter 
C)  short run; exit 
D)  long run; exit 
E)  More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry.

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

If perfectly competitive firms are maximizing their profit and are making an economic profit,the market in a short-run equilibrium and in a long-run equilibrium.

The above figure shows some a firm's cost curves and its marginal revenue curve. -The price for the shutdown point is ________.

-The above figure illustrates a perfectly competitive firm.Curve A represents the

The characteristics that describe a perfectly competitive industry include

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

A perfectly competitive firm is a price taker because

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

When new firms enter the perfectly competitive Miami bagel market,the market

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

-The above diagram shows the cost curves for a perfectly competitive wheat farmer.At what price does the wheat farmer shut down?

Perfect competition is characterized by all of the following EXCEPT

In which of the following market types do all firms sell products so identical that buyers do not care from which firm they buy?

A large number of sellers all selling an identical product implies which of the following?

A requirement of perfect competition is that i.many firms sell an identical product to many buyers. ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms. iii.sellers and buyers are well informed about prices.

If firms in a perfectly competitive industry are earning an economic profit,then in the ,firms will the industry.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 15: Perfect Competition

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

If perfectly competitive firms are maximizing their profit and are making an economic profit,the market ________ in a short-run equilibrium and ________ in a long-run equilibrium.

The above figure shows some a firm's cost curves and its marginal revenue curve. -The price for the shutdown point is ________.

-The above figure illustrates a perfectly competitive firm.Curve A represents the

The characteristics that describe a perfectly competitive industry include

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

A perfectly competitive firm is a price taker because

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

When new firms enter the perfectly competitive Miami bagel market,the market

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

-The above diagram shows the cost curves for a perfectly competitive wheat farmer.At what price does the wheat farmer shut down?

Perfect competition is characterized by all of the following EXCEPT

In which of the following market types do all firms sell products so identical that buyers do not care from which firm they buy?

A large number of sellers all selling an identical product implies which of the following?

A requirement of perfect competition is that i.many firms sell an identical product to many buyers. ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms. iii.sellers and buyers are well informed about prices.

If firms in a perfectly competitive industry are earning an economic profit,then in the ________,firms will ________ the industry.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If perfectly competitive firms are maximizing their profit and are making an economic profit,the market in a short-run equilibrium and in a long-run equilibrium.

If firms in a perfectly competitive industry are earning an economic profit,then in the ,firms will the industry.