Question 1

For a firm that is deciding how much to produce, the additional benefit comes in the form of marginal _____, and the additional cost is the _____ cost.

Accepted Answer

A)  utility; marginal 
B)  revenue; average total 
C)  revenue; marginal 
D)  utility; total 
A)  utility; marginal 
B)  revenue; average total 
C)  revenue; marginal 
D)  utility; total C

Question 2

Use the table Market Structures. For each letter in this table, indicate the market structure that fits the characteristics given for that row.
​

Accepted Answer

(A) Monopoly, (B) duopoly, (C) oligopoly, (D) monopolistic competition, (E) perfect competition

Question 3

In the market for empanadas, there are enough sellers that no individual firm can charge more than the market price of $2.95 per empanadas. What feature of perfect competition is this describing?

Accepted Answer

A)  perfect information 
B)  standardized product 
C)  easy entry and exit 
D)  many buyers and sellers 
A)  perfect information 
B)  standardized product 
C)  easy entry and exit 
D)  many buyers and sellers D

Question 4

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit or loss will it earn?
​
Figure: A Perfectly Competitive Market in the Short Run I

Accepted Answer

A)  The quantity is 20, and the profit is $300,000. 
B)  The quantity is 10, and the profits is $200,000. 
C)  The quantity is 20, and the loss is $200,000. 
D)  The quantity is 10, and the loss is $300,000. 
A)  The quantity is 20, and the profit is $300,000. 
B)  The quantity is 10, and the profits is $200,000. 
C)  The quantity is 20, and the loss is $200,000. 
D)  The quantity is 10, and the loss is $300,000.

Question 5

A perfectly competitive firm's short-run supply curve is the:

Accepted Answer

A)  marginal cost curve above the breakeven point. 
B)  average variable cost curve above the shutdown point. 
C)  average total cost curve above the shutdown point. 
D)  marginal cost curve above the shutdown point. 
A)  marginal cost curve above the breakeven point. 
B)  average variable cost curve above the shutdown point. 
C)  average total cost curve above the shutdown point. 
D)  marginal cost curve above the shutdown point.

Question 6

Perfectly competitive markets achieve efficiency in the allocation of resources by producing:

Accepted Answer

A)  all of the units that are worth less than the cost of producing them and none of the goods that cost more than they're worth. 
B)  all of the units that are worth more than the cost of producing them and only goods whose price is less than their average variable cost. 
C)  none of the goods that people value highly and only goods that people don't value. 
D)  all of the units that are worth more than the cost of producing them and none of the units that cost more than they're worth. 
A)  all of the units that are worth less than the cost of producing them and none of the goods that cost more than they're worth. 
B)  all of the units that are worth more than the cost of producing them and only goods whose price is less than their average variable cost. 
C)  none of the goods that people value highly and only goods that people don't value. 
D)  all of the units that are worth more than the cost of producing them and none of the units that cost more than they're worth.

Question 7

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market. If Alina has no incentive to exit this market and no other firms have incentive to enter this market, what must the price be?
​

Accepted Answer

A)  $28.28 
B)  $102 
C)  $30 
D)  $2 
A)  $28.28 
B)  $102 
C)  $30 
D)  $2

Question 8

Orchid Movers is a price taker in the market for cross-country moving services. The current price to move a two-bedroom house is $1,000, and given the number of homes that it is currently moving, the average cost of providing this service to Orchid Movers is $900. What statement best describes what is likely to happen in the market for moving services?

Accepted Answer

A)  Firms will enter this market and drive down the price of moving services. 
B)  Firms will exit this market and drive down the price of moving services. 
C)  Firms do not have an incentive to enter or exit this market. 
D)  Firms like Orchid Movers will shut down temporarily. 
A)  Firms will enter this market and drive down the price of moving services. 
B)  Firms will exit this market and drive down the price of moving services. 
C)  Firms do not have an incentive to enter or exit this market. 
D)  Firms like Orchid Movers will shut down temporarily.

Question 9

Use the figure A Perfectly Competitive Market in the Short Run II. If every firm in this market has the same costs, what will be the market price in the long run?
​
Figure: A Perfectly Competitive Market in the Short Run II

Accepted Answer

A)  $29 
B)  $22 
C)  $15 
D)  $20 
A)  $29 
B)  $22 
C)  $15 
D)  $20

Question 10

In a perfectly competitive market, each firm can sell _____ at the market price, and it can sell _____ at a price higher than the market price.

Accepted Answer

A)  nothing; slightly more 
B)  all they want; all it wants 
C)  all they want; less 
D)  all they want; nothing 
A)  nothing; slightly more 
B)  all they want; all it wants 
C)  all they want; less 
D)  all they want; nothing

Question 11

. Use the figure Costs for a Firm. Which prices in this graph make this firm willing to produce in the short run and in the long run?
​
Figure: Costs for a Firm

Accepted Answer

A)  $50 in the short run and $60 in the long run 
B)  $80 in the short run and $60 in the long run 
C)  $50 in the short run and $80 in the long run 
D)  $60 in the short run and $70 in the long run 
A)  $50 in the short run and $60 in the long run 
B)  $80 in the short run and $60 in the long run 
C)  $50 in the short run and $80 in the long run 
D)  $60 in the short run and $70 in the long run

Question 12

The market for corn bread mix is perfectly competitive. The lowest average variable cost for firm X in this market is $1, and the lowest average total cost is $3. At what price would this firm shut down immediately?

Accepted Answer

A)  $0.75 
B)  $1.10 
C)  $3 
D)  $4 
A)  $0.75 
B)  $1.10 
C)  $3 
D)  $4

Question 13

Use the table Costs for a Perfectly Competitive Firm. What price and quantity will this firm produce in a market in long-run equilibrium? Explain.

Accepted Answer

This firm will produce six units at a pr

Question 14

The marginal cost curve for Maisie's Muffins intersects its average variable cost curve at a price of $2 and intersects its average total cost curve at a price of $4. What is the minimum price that this firm needs to get to NOT shut down in the short run or the long run?

Accepted Answer

A)  $1 
B)  $2 
C)  $3 
D)  $4 
A)  $1 
B)  $2 
C)  $3 
D)  $4

Question 15

If the price of a good in a perfectly competitive market is $5, what is a firm's marginal revenue from the second unit that it sells? What is the firm's marginal revenue from the 1 millionth unit? Explain.

Accepted Answer

Marginal revenue is $5 whether it is the

Question 16

What is true about the products that are sold in a perfectly competitive market?

Accepted Answer

A)  There is a single product. 
B)  Every firm sells the same standardized product. 
C)  Every firm sells a product that is slightly differentiated from other products. 
D)  The products that are sold are completely different from each other. 
A)  There is a single product. 
B)  Every firm sells the same standardized product. 
C)  Every firm sells a product that is slightly differentiated from other products. 
D)  The products that are sold are completely different from each other.

Question 17

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit will it earn?
​
Figure: A Perfectly Competitive Market in the Short Run I

Accepted Answer

A)  The quantity is 10, and the profit is $100,000. 
B)  The quantity is 15, and the profit is $120,000. 
C)  The quantity is 10, and the profit is $80,000. 
D)  The quantity is 15, and the profit is $150,000. 
A)  The quantity is 10, and the profit is $100,000. 
B)  The quantity is 15, and the profit is $120,000. 
C)  The quantity is 10, and the profit is $80,000. 
D)  The quantity is 15, and the profit is $150,000.

Question 18

Use the figure A Perfectly Competitive Market. What is the marginal revenue that a firm in this market would earn from its 1,000th unit?
​
Figure: A Perfectly Competitive Market

Accepted Answer

A)  $8 
B)  $80,000 
C)  $7 
D)  $70,000 
A)  $8 
B)  $80,000 
C)  $7 
D)  $70,000

Question 19

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market where the price of a pie is currently $18. What will happen in the market in the long run?
​

Accepted Answer

A)  Firms will enter this market, increasing the market supply curve and decreasing price. 
B)  Firms will exit this market, increasing the market supply curve and decreasing price. 
C)  Firms will enter this market, decreasing the market supply curve and increasing price. 
D)  Firms will exit this market, decreasing the market supply curve and increasing price. 
A)  Firms will enter this market, increasing the market supply curve and decreasing price. 
B)  Firms will exit this market, increasing the market supply curve and decreasing price. 
C)  Firms will enter this market, decreasing the market supply curve and increasing price. 
D)  Firms will exit this market, decreasing the market supply curve and increasing price.

Question 20

Use the figure A Perfectly Competitive Market in the Short Run I. If every firm in this market has the same costs, what will be the market price in the long run?
​
Figure: A Perfectly Competitive Market in the Short Run I

Accepted Answer

A)  $20 
B)  $40 
C)  $50 
D)  $60 
A)  $20 
B)  $40 
C)  $50 
D)  $60

For a firm that is deciding how much to produce, the additional benefit comes in the form of marginal _, and the additional cost is the _ cost.

Use the table Market Structures. For each letter in this table, indicate the market structure that fits the characteristics given for that row.

In the market for empanadas, there are enough sellers that no individual firm can charge more than the market price of $2.95 per empanadas. What feature of perfect competition is this describing?

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit or loss will it earn? Figure: A Perfectly Competitive Market in the Short Run I

A perfectly competitive firm's short-run supply curve is the:

Perfectly competitive markets achieve efficiency in the allocation of resources by producing:

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market. If Alina has no incentive to exit this market and no other firms have incentive to enter this market, what must the price be?

Use the figure A Perfectly Competitive Market in the Short Run II. If every firm in this market has the same costs, what will be the market price in the long run? Figure: A Perfectly Competitive Market in the Short Run II

In a perfectly competitive market, each firm can sell _ at the market price, and it can sell _ at a price higher than the market price.

. Use the figure Costs for a Firm. Which prices in this graph make this firm willing to produce in the short run and in the long run? Figure: Costs for a Firm

The market for corn bread mix is perfectly competitive. The lowest average variable cost for firm X in this market is $1, and the lowest average total cost is $3. At what price would this firm shut down immediately?

Use the table Costs for a Perfectly Competitive Firm. What price and quantity will this firm produce in a market in long-run equilibrium? Explain.

The marginal cost curve for Maisie's Muffins intersects its average variable cost curve at a price of $2 and intersects its average total cost curve at a price of $4. What is the minimum price that this firm needs to get to NOT shut down in the short run or the long run?

If the price of a good in a perfectly competitive market is $5, what is a firm's marginal revenue from the second unit that it sells? What is the firm's marginal revenue from the 1 millionth unit? Explain.

What is true about the products that are sold in a perfectly competitive market?

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit will it earn? Figure: A Perfectly Competitive Market in the Short Run I

Use the figure A Perfectly Competitive Market. What is the marginal revenue that a firm in this market would earn from its 1,000th unit? Figure: A Perfectly Competitive Market

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market where the price of a pie is currently $18. What will happen in the market in the long run?

Use the figure A Perfectly Competitive Market in the Short Run I. If every firm in this market has the same costs, what will be the market price in the long run? Figure: A Perfectly Competitive Market in the Short Run I

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 9: Perfect Competition

For a firm that is deciding how much to produce, the additional benefit comes in the form of marginal _____, and the additional cost is the _____ cost.

Use the table Market Structures. For each letter in this table, indicate the market structure that fits the characteristics given for that row. ​

In the market for empanadas, there are enough sellers that no individual firm can charge more than the market price of $2.95 per empanadas. What feature of perfect competition is this describing?

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit or loss will it earn? ​ Figure: A Perfectly Competitive Market in the Short Run I

A perfectly competitive firm's short-run supply curve is the:

Perfectly competitive markets achieve efficiency in the allocation of resources by producing:

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market. If Alina has no incentive to exit this market and no other firms have incentive to enter this market, what must the price be? ​

Use the figure A Perfectly Competitive Market in the Short Run II. If every firm in this market has the same costs, what will be the market price in the long run? ​ Figure: A Perfectly Competitive Market in the Short Run II

In a perfectly competitive market, each firm can sell _____ at the market price, and it can sell _____ at a price higher than the market price.

. Use the figure Costs for a Firm. Which prices in this graph make this firm willing to produce in the short run and in the long run? ​ Figure: Costs for a Firm

The market for corn bread mix is perfectly competitive. The lowest average variable cost for firm X in this market is $1, and the lowest average total cost is $3. At what price would this firm shut down immediately?

Use the table Costs for a Perfectly Competitive Firm. What price and quantity will this firm produce in a market in long-run equilibrium? Explain.

The marginal cost curve for Maisie's Muffins intersects its average variable cost curve at a price of $2 and intersects its average total cost curve at a price of $4. What is the minimum price that this firm needs to get to NOT shut down in the short run or the long run?

If the price of a good in a perfectly competitive market is $5, what is a firm's marginal revenue from the second unit that it sells? What is the firm's marginal revenue from the 1 millionth unit? Explain.

What is true about the products that are sold in a perfectly competitive market?

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit will it earn? ​ Figure: A Perfectly Competitive Market in the Short Run I

Use the figure A Perfectly Competitive Market. What is the marginal revenue that a firm in this market would earn from its 1,000th unit? ​ Figure: A Perfectly Competitive Market

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market where the price of a pie is currently $18. What will happen in the market in the long run? ​

Use the figure A Perfectly Competitive Market in the Short Run I. If every firm in this market has the same costs, what will be the market price in the long run? ​ Figure: A Perfectly Competitive Market in the Short Run I

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

For a firm that is deciding how much to produce, the additional benefit comes in the form of marginal _, and the additional cost is the _ cost.

Use the table Market Structures. For each letter in this table, indicate the market structure that fits the characteristics given for that row.

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit or loss will it earn? Figure: A Perfectly Competitive Market in the Short Run I

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market. If Alina has no incentive to exit this market and no other firms have incentive to enter this market, what must the price be?

Use the figure A Perfectly Competitive Market in the Short Run II. If every firm in this market has the same costs, what will be the market price in the long run? Figure: A Perfectly Competitive Market in the Short Run II

In a perfectly competitive market, each firm can sell _ at the market price, and it can sell _ at a price higher than the market price.

. Use the figure Costs for a Firm. Which prices in this graph make this firm willing to produce in the short run and in the long run? Figure: Costs for a Firm

Use the figure A Perfectly Competitive Market in the Short Run I. What is the quantity that this firm will produce, and how much profit will it earn? Figure: A Perfectly Competitive Market in the Short Run I

Use the figure A Perfectly Competitive Market. What is the marginal revenue that a firm in this market would earn from its 1,000th unit? Figure: A Perfectly Competitive Market

Use the table Costs for Alina's Apple Pies. Alina's Apple Pies operates in a perfectly competitive market where the price of a pie is currently $18. What will happen in the market in the long run?

Use the figure A Perfectly Competitive Market in the Short Run I. If every firm in this market has the same costs, what will be the market price in the long run? Figure: A Perfectly Competitive Market in the Short Run I