Question 1

Marginal revenue is

Accepted Answer

A)  the change in total revenue from a one-unit increase in the quantity sold. 
B)  another name for total revenue. 
C)  the change in total cost from producing an additional unit of output. 
D)  the economic profit from producing an additional unit of output. 
E)  less than price for a perfectly competitive firm. 
A)  the change in total revenue from a one-unit increase in the quantity sold. 
B)  another name for total revenue. 
C)  the change in total cost from producing an additional unit of output. 
D)  the economic profit from producing an additional unit of output. 
E)  less than price for a perfectly competitive firm.

Question 2

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

Accepted Answer

A perfectly competitive producer has no

Question 3

The market demand curve in a perfectly competitive market is ________ and the demand curve for a perfectly competitive firm's output is ________.

Accepted Answer

A)  downward sloping; downward sloping 
B)  downward sloping; horizontal 
C)  horizontal; downward sloping 
D)  horizontal; horizontal 
E)  downward sloping; upward sloping 
A)  downward sloping; downward sloping 
B)  downward sloping; horizontal 
C)  horizontal; downward sloping 
D)  horizontal; horizontal 
E)  downward sloping; upward sloping

Question 4

Catfish farming is a perfectly competitive industry.Catfish farmers suffered tremendous economic losses in the late 2000s.As a result,

Accepted Answer

A)  some new catfish farmers entered the market. 
B)  some catfish farmers exited the market. 
C)  no catfish farmers entered or exited this market. 
D)  the supply of catfish increased in 2010. 
E)  new demanders entered the market after some firms had exited. 
A)  some new catfish farmers entered the market. 
B)  some catfish farmers exited the market. 
C)  no catfish farmers entered or exited this market. 
D)  the supply of catfish increased in 2010. 
E)  new demanders entered the market after some firms had exited.

Question 5

A permanent decrease in demand definitely

Accepted Answer

A)  shifts a firm's average total cost curve downward. 
B)  creates diseconomies for individual firms. 
C)  lowers the market price. 
D)  decreases the number of firms in the industry. 
E)  shifts a firm's average total cost curve upward. 
A)  shifts a firm's average total cost curve downward. 
B)  creates diseconomies for individual firms. 
C)  lowers the market price. 
D)  decreases the number of firms in the industry. 
E)  shifts a firm's average total cost curve upward.

Question 6

The above figure shows some a firm's cost curves and its marginal revenue curve.
-Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________.

Accepted Answer

A)  is; incurring an economic loss 
B)  is; making zero economic profit 
C)  is; making an economic profit 
D)  is not; incurring an economic loss 
E)  is not; making zero economic profit 
A)  is; incurring an economic loss 
B)  is; making zero economic profit 
C)  is; making an economic profit 
D)  is not; incurring an economic loss 
E)  is not; making zero economic profit

Question 7

In which market structure are there a small number of firms competing?

Accepted Answer

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

Question 8

Which of the following will increase a perfectly competitive seller's short-run supply and shift the firm's short-run supply curve rightward?

Accepted Answer

A)  an increase in the market price 
B)  a decrease in average fixed costs 
C)  a decrease in marginal cost 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct. 
A)  an increase in the market price 
B)  a decrease in average fixed costs 
C)  a decrease in marginal cost 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct.

Question 9

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

Accepted Answer

A)  definitely produce the unit. 
B)  shut down. 
C)  not produce the unit but remain open. 
D)  not produce the unit. Whether the firm should shut down or remain open cannot be determined without more information. 
E)  produce the unit only if the price exceeds the average fixed cost. 
A)  definitely produce the unit. 
B)  shut down. 
C)  not produce the unit but remain open. 
D)  not produce the unit. Whether the firm should shut down or remain open cannot be determined without more information. 
E)  produce the unit only if the price exceeds the average fixed cost.

Question 10

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Accepted Answer

A)  will definitely shut down to minimize its losses. 
B)  will stay open to produce and will make zero economic profit. 
C)  will stay open to produce and will incur an economic loss. 
D)  will stay open to produce and will make an economic profit. 
E)  might shut down but more information is needed about the fixed cost. 
A)  will definitely shut down to minimize its losses. 
B)  will stay open to produce and will make zero economic profit. 
C)  will stay open to produce and will incur an economic loss. 
D)  will stay open to produce and will make an economic profit. 
E)  might shut down but more information is needed about the fixed cost.

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

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

Accepted Answer

A)  W 
B)  X 
C)  Y 
D)  Z 
E)  X and Figure Z 
A)  W 
B)  X 
C)  Y 
D)  Z 
E)  X and Figure Z

Question 13

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

Accepted Answer

A)  3 
B)  5 
C)  6 
D)  8 
E)  7 
A)  3 
B)  5 
C)  6 
D)  8 
E)  7

Question 14

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm.
-Based on the figure above,what is the price of a can?

Accepted Answer

A)  $0. 
B)  $3.00 per can 
C)  $5.14 per can 
D)  None of the above prices is correct. 
E)  More information is needed to determine the price of a can. 
A)  $0. 
B)  $3.00 per can 
C)  $5.14 per can 
D)  None of the above prices is correct. 
E)  More information is needed to determine the price of a can.

Question 15

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

Accepted Answer

A)  $0 because Bill shuts down. 
B)  more than $0 and less than $1,200 per week. 
C)  more than $1,200 and less than $1,400 per week. 
D)  more than $1,400 per week and less than $1,800 per week. 
E)  more than $1,800 per week. 
A)  $0 because Bill shuts down. 
B)  more than $0 and less than $1,200 per week. 
C)  more than $1,200 and less than $1,400 per week. 
D)  more than $1,400 per week and less than $1,800 per week. 
E)  more than $1,800 per week.

Question 16

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

Accepted Answer

Acme's most profitable (which means,in t

Question 17

________ a large number of firms competing by making similar but slightly different products.

Accepted Answer

A)  Monopoly requires 
B)  Perfect competition requires 
C)  Monopolistic competition requires 
D)  Oligopoly requires 
E)  Both perfect competition and monopolistic competition require 
A)  Monopoly requires 
B)  Perfect competition requires 
C)  Monopolistic competition requires 
D)  Oligopoly requires 
E)  Both perfect competition and monopolistic competition require

Question 18

The demand curve faced by a perfectly competitive firm is

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  downward sloping. 
D)  upward sloping. 
E)  U-shaped. 
A)  horizontal. 
B)  vertical. 
C)  downward sloping. 
D)  upward sloping. 
E)  U-shaped.

Question 19

In perfect competition,marginal revenue

Accepted Answer

A)  increases as more is sold. 
B)  decreases as more is sold. 
C)  is equal to the market price. 
D)  is zero. 
E)  is always greater than marginal cost. 
A)  increases as more is sold. 
B)  decreases as more is sold. 
C)  is equal to the market price. 
D)  is zero. 
E)  is always greater than marginal cost.

Question 20

A market is classified as monopolistically competitive when

Accepted Answer

A)  there is a barrier that blocks entry by other firms. 
B)  a small number of firms compete. 
C)  many firms produce the same product. 
D)  many firms produce a slightly differentiated product. 
E)  there is one firm that sells a good or service with no close substitutes. 
A)  there is a barrier that blocks entry by other firms. 
B)  a small number of firms compete. 
C)  many firms produce the same product. 
D)  many firms produce a slightly differentiated product. 
E)  there is one firm that sells a good or service with no close substitutes.

Marginal revenue is

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

The market demand curve in a perfectly competitive market is and the demand curve for a perfectly competitive firm's output is .

Catfish farming is a perfectly competitive industry.Catfish farmers suffered tremendous economic losses in the late 2000s.As a result,

A permanent decrease in demand definitely

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm maximizing its profit and is .

In which market structure are there a small number of firms competing?

Which of the following will increase a perfectly competitive seller's short-run supply and shift the firm's short-run supply curve rightward?

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

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.

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm. -Based on the figure above,what is the price of a can?

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

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

________ a large number of firms competing by making similar but slightly different products.

The demand curve faced by a perfectly competitive firm is

In perfect competition,marginal revenue

A market is classified as monopolistically competitive when

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

Marginal revenue is

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

The market demand curve in a perfectly competitive market is ________ and the demand curve for a perfectly competitive firm's output is ________.

Catfish farming is a perfectly competitive industry.Catfish farmers suffered tremendous economic losses in the late 2000s.As a result,

A permanent decrease in demand definitely

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________.

In which market structure are there a small number of firms competing?

Which of the following will increase a perfectly competitive seller's short-run supply and shift the firm's short-run supply curve rightward?

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

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.

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm. -Based on the figure above,what is the price of a can?

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

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

________ a large number of firms competing by making similar but slightly different products.

The demand curve faced by a perfectly competitive firm is

In perfect competition,marginal revenue

A market is classified as monopolistically competitive when

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

The market demand curve in a perfectly competitive market is and the demand curve for a perfectly competitive firm's output is .

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm maximizing its profit and is .