Question 1

A perfectly competitive firm's marginal revenue is

Accepted Answer

A) slightly higher than it's selling price. 
B) slightly lower than it's selling price. 
C) higher than selling price when reducing output,lower than selling price when increasing output. 
D) exactly equal to selling price. 
A) slightly higher than it's selling price. 
B) slightly lower than it's selling price. 
C) higher than selling price when reducing output,lower than selling price when increasing output. 
D) exactly equal to selling price.

Question 2

In short-run equilibrium in perfect competition,

Accepted Answer

A) each firm's profit is measured by P - ATC 
B) each firm's profit is measured by ATC - P 
C) each firm's (economic)profit is positive 
D) the amount sold by existing firms at the market price is exactly equal to the quantity consumers demand at that price 
E) no firm wishes to enter the market 
A) each firm's profit is measured by P - ATC 
B) each firm's profit is measured by ATC - P 
C) each firm's (economic)profit is positive 
D) the amount sold by existing firms at the market price is exactly equal to the quantity consumers demand at that price 
E) no firm wishes to enter the market

Question 3

Figure 9-18
  
-If the perfectly competitive firm pictured in Figure 9-18 is maximizing profits,it is currently earning profit per unit of

Accepted Answer

A) $0. 
B) $125. 
C) $5. 
D) $10. 
A) $0. 
B) $125. 
C) $5. 
D) $10.

Question 4

Barriers to entry into a market could include all of the following,except one.Which is the exception?

Accepted Answer

A) government restrictions 
B) brand loyalty 
C) large marginal costs 
D) licensing fees 
E) large fixed costs 
A) government restrictions 
B) brand loyalty 
C) large marginal costs 
D) licensing fees 
E) large fixed costs

Question 5

The minimum short-run average total cost for Tony's Barbecue equals $8.50 at an output level of 100 meals per day.The market price of each meal is $8.In short-run equilibrium,Tony

Accepted Answer

A) will suffer an economic loss of $50 per day,serving 100 meals per day 
B) cannot avoid an economic loss and should produce where the difference between average total cost and the price is minimized 
C) cannot avoid an economic loss and should serve no meals per day 
D) will suffer an economic loss greater than $50 per day,serving more than 100 meals per day 
E) will suffer an economic loss greater than $50 per day,serving less than 100 meals per day 
A) will suffer an economic loss of $50 per day,serving 100 meals per day 
B) cannot avoid an economic loss and should produce where the difference between average total cost and the price is minimized 
C) cannot avoid an economic loss and should serve no meals per day 
D) will suffer an economic loss greater than $50 per day,serving more than 100 meals per day 
E) will suffer an economic loss greater than $50 per day,serving less than 100 meals per day

Question 6

In the long run in perfect competition,firms will operate at

Accepted Answer

A) minimum average total cost. 
B) an average total cost that is just slightly above the minimum. 
C) an average total cost that is about 10% above the minimum. 
D) an average total cost that is below price. 
A) minimum average total cost. 
B) an average total cost that is just slightly above the minimum. 
C) an average total cost that is about 10% above the minimum. 
D) an average total cost that is below price.

Question 7

In the short run,the perfectly competitive market supply curve

Accepted Answer

A) is indeterminate 
B) shows the total quantities of resources used by all firms in that market,given the market price of resources 
C) is the same as the individual supply curve of the dominant firm 
D) shows the sum of the quantities of output supplied by all firms in the market at each price 
E) is irrelevant to potential entrants 
A) is indeterminate 
B) shows the total quantities of resources used by all firms in that market,given the market price of resources 
C) is the same as the individual supply curve of the dominant firm 
D) shows the sum of the quantities of output supplied by all firms in the market at each price 
E) is irrelevant to potential entrants

Question 8

Under perfect competition,a technological advance

Accepted Answer

A) shifts the market demand curve leftward,decreasing market price 
B) shifts the market supply curve rightward,decreasing market price 
C) shifts the market demand curve rightward,increasing market price 
D) shifts the market supply curve leftward,increasing market price 
E) causes unpredictable shifts in supply and demand 
A) shifts the market demand curve leftward,decreasing market price 
B) shifts the market supply curve rightward,decreasing market price 
C) shifts the market demand curve rightward,increasing market price 
D) shifts the market supply curve leftward,increasing market price 
E) causes unpredictable shifts in supply and demand

Question 9

For a perfectly competitive firm,

Accepted Answer

A) marginal revenue is the same as the market price 
B) marginal revenue equals total revenue 
C) to earn an economic profit,it must be larger than its competitors 
D) price always exceeds average total cost 
E) marginal cost is always equal to average cost 
A) marginal revenue is the same as the market price 
B) marginal revenue equals total revenue 
C) to earn an economic profit,it must be larger than its competitors 
D) price always exceeds average total cost 
E) marginal cost is always equal to average cost

Question 10

The characteristics of a market that influence the behavior of market participants is (are)known as

Accepted Answer

A) perfect competition 
B) market power 
C) barriers to entry 
D) market structure 
E) monopolistic competition 
A) perfect competition 
B) market power 
C) barriers to entry 
D) market structure 
E) monopolistic competition

Question 11

The price at which a firm is indifferent between producing and shutting down is called the

Accepted Answer

A) shutdown price. 
B) lockdown price. 
C) marginal cost. 
D) minimum supply price. 
A) shutdown price. 
B) lockdown price. 
C) marginal cost. 
D) minimum supply price.

Question 12

The model of perfect competition can be fruitfully used to analyze markets that don't perfectly fit the description of this market type.

Accepted Answer

A) True 
 B)False

Question 13

If the firms in a perfectly competitive market are continually operating where their total costs exceed their total revenue in the short run,then in the long run

Accepted Answer

A) the number of firms in the market will remain unchanged 
B) the number of firms in the market will increase 
C) the number of firms in the market will decrease 
D) existing firms will increase their plant sizes 
E) existing firms will increase their output 
A) the number of firms in the market will remain unchanged 
B) the number of firms in the market will increase 
C) the number of firms in the market will decrease 
D) existing firms will increase their plant sizes 
E) existing firms will increase their output

Question 14

Bennie's Top Factory produces 1,000 tops per day for a total daily revenue of $2,000.Bennie's total costs would rise by $2 if it produced the 1,001ˢᵗ top.Because marginal revenue and price are equal and constant,

Accepted Answer

A) profit would rise by $2 if Bennie produced one additional top 
B) profit would fall by $2 if Bennie produced one additional top 
C) profit would not change if Bennie produced one additional top 
D) profit will fall by some unknown amount if Bennie produced one additional top 
E) the total cost curve must have shifted to the left 
A) profit would rise by $2 if Bennie produced one additional top 
B) profit would fall by $2 if Bennie produced one additional top 
C) profit would not change if Bennie produced one additional top 
D) profit will fall by some unknown amount if Bennie produced one additional top 
E) the total cost curve must have shifted to the left

Question 15

A firm that operates in a perfectly competitive market

Accepted Answer

A) controls its own price,but accepts its output level as given 
B) controls both its own price and its own output level 
C) controls its own output level,but accepts its price as given 
D) accepts both its output level and its price as given 
E) controls its own price,its own output level,and its own costs 
A) controls its own price,but accepts its output level as given 
B) controls both its own price and its own output level 
C) controls its own output level,but accepts its price as given 
D) accepts both its output level and its price as given 
E) controls its own price,its own output level,and its own costs

Question 16

Under conditions of perfect competition,if any one buyer increases her purchases,the market price

Accepted Answer

A) rises 
B) remains unchanged 
C) falls 
D) either rises or falls 
E) will change,but in an unpredictable fashion 
A) rises 
B) remains unchanged 
C) falls 
D) either rises or falls 
E) will change,but in an unpredictable fashion

Question 17

Joe's Garage operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $20,AVC = $15,and the price per unit is $10.In this situation,

Accepted Answer

A) Joe's Garage will break even 
B) Joe's Garage will shut down immediately 
C) the market price will fall in the long run 
D) Joe's supply curve will shift to the left 
E) Joe's Garage will suffer a loss in the short run,but stay in business 
A) Joe's Garage will break even 
B) Joe's Garage will shut down immediately 
C) the market price will fall in the long run 
D) Joe's supply curve will shift to the left 
E) Joe's Garage will suffer a loss in the short run,but stay in business

Question 18

In the long run in perfectly competitive markets,individual firms will operate at very different output levels.

Accepted Answer

A) True 
 B)False

Question 19

A perfectly competitive firm's total revenue curve

Accepted Answer

A) is a horizontal line 
B) is a vertical line 
C) is constant 
D) has a negative slope 
E) has a constant positive slope 
A) is a horizontal line 
B) is a vertical line 
C) is constant 
D) has a negative slope 
E) has a constant positive slope

Question 20

In a perfectly competitive market equilibrium,

Accepted Answer

A) each firm's marginal cost is equal to the market price 
B) each consumer's marginal utility is equal to the market price 
C) each firm's marginal cost is equal to each consumer's marginal utility 
D) price equals minimum marginal cost 
E) price equals minimum average total cost 
A) each firm's marginal cost is equal to the market price 
B) each consumer's marginal utility is equal to the market price 
C) each firm's marginal cost is equal to each consumer's marginal utility 
D) price equals minimum marginal cost 
E) price equals minimum average total cost

A perfectly competitive firm's marginal revenue is

In short-run equilibrium in perfect competition,

Figure 9-18 -If the perfectly competitive firm pictured in Figure 9-18 is maximizing profits,it is currently earning profit per unit of

Barriers to entry into a market could include all of the following,except one.Which is the exception?

The minimum short-run average total cost for Tony's Barbecue equals $8.50 at an output level of 100 meals per day.The market price of each meal is $8.In short-run equilibrium,Tony

In the long run in perfect competition,firms will operate at

In the short run,the perfectly competitive market supply curve

Under perfect competition,a technological advance

For a perfectly competitive firm,

The characteristics of a market that influence the behavior of market participants is (are)known as

The price at which a firm is indifferent between producing and shutting down is called the

The model of perfect competition can be fruitfully used to analyze markets that don't perfectly fit the description of this market type.

If the firms in a perfectly competitive market are continually operating where their total costs exceed their total revenue in the short run,then in the long run

Bennie's Top Factory produces 1,000 tops per day for a total daily revenue of $2,000.Bennie's total costs would rise by $2 if it produced the 1,001ˢᵗ top.Because marginal revenue and price are equal and constant,

A firm that operates in a perfectly competitive market

Under conditions of perfect competition,if any one buyer increases her purchases,the market price

Joe's Garage operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $20,AVC = $15,and the price per unit is $10.In this situation,

In the long run in perfectly competitive markets,individual firms will operate at very different output levels.

A perfectly competitive firm's total revenue curve

In a perfectly competitive market equilibrium,

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 9: Perfect Competition

A perfectly competitive firm's marginal revenue is

In short-run equilibrium in perfect competition,

Figure 9-18 -If the perfectly competitive firm pictured in Figure 9-18 is maximizing profits,it is currently earning profit per unit of

Barriers to entry into a market could include all of the following,except one.Which is the exception?

The minimum short-run average total cost for Tony's Barbecue equals $8.50 at an output level of 100 meals per day.The market price of each meal is $8.In short-run equilibrium,Tony

In the long run in perfect competition,firms will operate at

In the short run,the perfectly competitive market supply curve

Under perfect competition,a technological advance

For a perfectly competitive firm,

The characteristics of a market that influence the behavior of market participants is (are)known as

The price at which a firm is indifferent between producing and shutting down is called the

The model of perfect competition can be fruitfully used to analyze markets that don't perfectly fit the description of this market type.

If the firms in a perfectly competitive market are continually operating where their total costs exceed their total revenue in the short run,then in the long run

Bennie's Top Factory produces 1,000 tops per day for a total daily revenue of $2,000.Bennie's total costs would rise by $2 if it produced the 1,001ˢᵗ top.Because marginal revenue and price are equal and constant,

A firm that operates in a perfectly competitive market

Under conditions of perfect competition,if any one buyer increases her purchases,the market price

Joe's Garage operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $20,AVC = $15,and the price per unit is $10.In this situation,

In the long run in perfectly competitive markets,individual firms will operate at very different output levels.

A perfectly competitive firm's total revenue curve

In a perfectly competitive market equilibrium,

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters