Question 1

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

Accepted Answer

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

Question 2

Why are perfectly competitive ranchers in Montana price takers?

Accepted Answer

Because one farmer's beef is identical t

Question 3

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 4

A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

Accepted Answer

A)  marginal cost. 
B)  marginal revenue. 
C)  average total cost. 
D)  fixed costs. 
E)  average variable costs. 
A)  marginal cost. 
B)  marginal revenue. 
C)  average total cost. 
D)  fixed costs. 
E)  average variable costs.

Question 5

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

Accepted Answer

A)  immediately shut down. 
B)  continue to produce if the price exceeds the average fixed cost. 
C)  continue to produce if the price exceeds the average variable cost. 
D)  shut down if the price exceeds the average fixed cost. 
E)  shut down if the price is less than the average fixed cost. 
A)  immediately shut down. 
B)  continue to produce if the price exceeds the average fixed cost. 
C)  continue to produce if the price exceeds the average variable cost. 
D)  shut down if the price exceeds the average fixed cost. 
E)  shut down if the price is less than the average fixed cost.

Question 6

The figure above shows some of a firm's cost curves and its marginal revenue curve.
-The firm in the figure above has a total cost equal to ________ .

Accepted Answer

A)  $5.10 × 10 
B)  $8.00 × 10 
C)  ($5.10 - $8.00) × 10 
D)  ($8.00 - $5.10) × 10 
E)  None of the above answers are correct because more information is needed. 
A)  $5.10 × 10 
B)  $8.00 × 10 
C)  ($5.10 - $8.00) × 10 
D)  ($8.00 - $5.10) × 10 
E)  None of the above answers are correct because more information is needed.

Question 7

Normal profit is

Accepted Answer

A)  the same thing as economic profit. 
B)  the return to entrepreneurship. 
C)  total revenue minus the total opportunity cost of production. 
D)  the point of profit when total revenue is maximized. 
E)  part of the firm's total revenue. 
A)  the same thing as economic profit. 
B)  the return to entrepreneurship. 
C)  total revenue minus the total opportunity cost of production. 
D)  the point of profit when total revenue is maximized. 
E)  part of the firm's total revenue.

Question 8

When new firms enter a perfectly competitive market,the market supply curve shifts ________ and the price ________.

Accepted Answer

A)  rightward; falls 
B)  rightward; rises 
C)  leftward; falls 
D)  leftward; rises 
E)  rightward; does not change 
A)  rightward; falls 
B)  rightward; rises 
C)  leftward; falls 
D)  leftward; rises 
E)  rightward; does not change

Question 9

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Accepted Answer

A)  equal to marginal cost. 
B)  equal to average total cost. 
C)  greater than average total cost. 
D)  greater than marginal cost. 
E)  greater than average variable cost. 
A)  equal to marginal cost. 
B)  equal to average total cost. 
C)  greater than average total cost. 
D)  greater than marginal cost. 
E)  greater than average variable cost.

Question 10

Suppose a perfectly competitive market is in short-run equilibrium.Firms that are incurring a ________ economic loss ________.

Accepted Answer

A)  persistent; increase their output to increase their profit 
B)  temporary; exit the industry 
C)  temporary; decrease their production but definitely stay open 
D)  persistent; exit the industry and shift the market supply curve leftward 
E)  persistent; exit the industry and shift the market supply curve rightward 
A)  persistent; increase their output to increase their profit 
B)  temporary; exit the industry 
C)  temporary; decrease their production but definitely stay open 
D)  persistent; exit the industry and shift the market supply curve leftward 
E)  persistent; exit the industry and shift the market supply curve rightward

Question 11

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 12

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?

Accepted Answer

A)  0 
B)  4 or 5 
C)  3 or 4 
D)  1 or 2 
E)  6 
A)  0 
B)  4 or 5 
C)  3 or 4 
D)  1 or 2 
E)  6

Question 13

For a perfectly competitive firm,the price of its good is equal to the firm's marginal revenue because

Accepted Answer

A)  information about price changes is hard to come by for small sellers. 
B)  price and marginal revenue are the same economic concepts. 
C)  individual perfectly competitive firms cannot influence the market price by changing their output. 
D)  the firm's total revenue cannot be changed by anything the firms can do. 
E)  there are only a small number of firms in the market. 
A)  information about price changes is hard to come by for small sellers. 
B)  price and marginal revenue are the same economic concepts. 
C)  individual perfectly competitive firms cannot influence the market price by changing their output. 
D)  the firm's total revenue cannot be changed by anything the firms can do. 
E)  there are only a small number of firms in the market.

Question 14

What is a perfectly competitive firm's short-run supply curve?

Accepted Answer

A perfectly competitive firm's

Question 15

In a market undergoing technological change,firms that

Accepted Answer

A)  adopt the new technology temporarily incur an economic loss. 
B)  adopt the new technology temporarily make an economic profit. 
C)  do not adopt the new technology temporarily make an economic profit. 
D)  do not adopt the new technology increase their market share. 
E)  do not adopt the new technology continue to make a normal profit. 
A)  adopt the new technology temporarily incur an economic loss. 
B)  adopt the new technology temporarily make an economic profit. 
C)  do not adopt the new technology temporarily make an economic profit. 
D)  do not adopt the new technology increase their market share. 
E)  do not adopt the new technology continue to make a normal profit.

Question 16

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic ________ equals ________.

Accepted Answer

A)  loss; $800 per week 
B)  profit; $1,280 per week 
C)  profit; $480 per week 
D)  loss; $1,280 per week 
E)  profit; $32 per week 
A)  loss; $800 per week 
B)  profit; $1,280 per week 
C)  profit; $480 per week 
D)  loss; $1,280 per week 
E)  profit; $32 per week

Question 17

A market is classified as an oligopoly when

Accepted Answer

A)  a few firms compete. 
B)  many firms produce a slightly differentiated product. 
C)  no matter how many firms are in the market, a barrier blocks entry by other new firms. 
D)  many firms produce the same product. 
E)  only one firm sells a product with no close substitutes. 
A)  a few firms compete. 
B)  many firms produce a slightly differentiated product. 
C)  no matter how many firms are in the market, a barrier blocks entry by other new firms. 
D)  many firms produce the same product. 
E)  only one firm sells a product with no close substitutes.

Question 18

If firms in a perfectly competitive market are incurring economic losses,then as time passes firms ________ and the market ________.

Accepted Answer

A)  enter; demand curve shifts leftward 
B)  enter; supply curve shifts rightward 
C)  exit; demand curve shifts leftward 
D)  exit; supply curve shifts rightward 
E)  exit; supply curve shifts leftward 
A)  enter; demand curve shifts leftward 
B)  enter; supply curve shifts rightward 
C)  exit; demand curve shifts leftward 
D)  exit; supply curve shifts rightward 
E)  exit; supply curve shifts leftward

Question 19

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

Accepted Answer

A)  rise; entry by new firms 
B)  fall; exit by existing firms 
C)  fall; entry by new firms 
D)  rise; exit by existing firms 
E)  fall; neither entry nor exit because the market is perfectly competitive 
A)  rise; entry by new firms 
B)  fall; exit by existing firms 
C)  fall; entry by new firms 
D)  rise; exit by existing firms 
E)  fall; neither entry nor exit because the market is perfectly competitive

Question 20

The four market types are

Accepted Answer

A)  perfect competition, imperfect competition, monopoly, and oligopoly. 
B)  oligopoly, monopsony, monopoly, and imperfect competition. 
C)  perfect competition, monopoly, monopolistic competition, and oligopoly. 
D)  oligopoly, oligopolistic competition, monopoly, and perfect competition. 
E)  perfect competition, imperfect competition, monopoly, and duopoly. 
A)  perfect competition, imperfect competition, monopoly, and oligopoly. 
B)  oligopoly, monopsony, monopoly, and imperfect competition. 
C)  perfect competition, monopoly, monopolistic competition, and oligopoly. 
D)  oligopoly, oligopolistic competition, monopoly, and perfect competition. 
E)  perfect competition, imperfect competition, monopoly, and duopoly.

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

Why are perfectly competitive ranchers in Montana price takers?

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

A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

The figure above shows some of a firm's cost curves and its marginal revenue curve. -The firm in the figure above has a total cost equal to ________ .

Normal profit is

When new firms enter a perfectly competitive market,the market supply curve shifts and the price .

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Suppose a perfectly competitive market is in short-run equilibrium.Firms that are incurring a economic loss .

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?

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?

For a perfectly competitive firm,the price of its good is equal to the firm's marginal revenue because

What is a perfectly competitive firm's short-run supply curve?

In a market undergoing technological change,firms that

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic equals .

A market is classified as an oligopoly when

If firms in a perfectly competitive market are incurring economic losses,then as time passes firms and the market .

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .

The four market types are

Getting Started

The Usand 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

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

Why are perfectly competitive ranchers in Montana price takers?

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

A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

The figure above shows some of a firm's cost curves and its marginal revenue curve. -The firm in the figure above has a total cost equal to ________ .

Normal profit is

When new firms enter a perfectly competitive market,the market supply curve shifts ________ and the price ________.

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Suppose a perfectly competitive market is in short-run equilibrium.Firms that are incurring a ________ economic loss ________.

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?

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?

For a perfectly competitive firm,the price of its good is equal to the firm's marginal revenue because

What is a perfectly competitive firm's short-run supply curve?

In a market undergoing technological change,firms that

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic ________ equals ________.

A market is classified as an oligopoly when

If firms in a perfectly competitive market are incurring economic losses,then as time passes firms ________ and the market ________.

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

The four market types are

Getting Started

The Usand 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

When new firms enter a perfectly competitive market,the market supply curve shifts and the price .

Suppose a perfectly competitive market is in short-run equilibrium.Firms that are incurring a economic loss .

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic equals .

If firms in a perfectly competitive market are incurring economic losses,then as time passes firms and the market .

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .