Question 1

The demand curve facing a perfectly competitive firm is

Accepted Answer

A) vertical. 
B) horizontal. 
C) positively sloped. 
D) negatively sloped. 
A) vertical. 
B) horizontal. 
C) positively sloped. 
D) negatively sloped.

Question 2

As new firms enter a market,the equilibrium price will

Accepted Answer

A) rise. 
B) fall. 
C) stay the same. 
D) impossible to predict. 
A) rise. 
B) fall. 
C) stay the same. 
D) impossible to predict.

Question 3

Under perfect competition,

Accepted Answer

A) a single seller sets the price 
B) sellers can easily enter or exit the market 
C) a small number of sellers offer differentiated products 
D) a government franchise protects sellers 
E) an intense rivalry between two powerful firms determines the market price 
A) a single seller sets the price 
B) sellers can easily enter or exit the market 
C) a small number of sellers offer differentiated products 
D) a government franchise protects sellers 
E) an intense rivalry between two powerful firms determines the market price

Question 4

Which of the following is a characteristic of perfect competition?

Accepted Answer

A) Individual firms have the power to set prices. 
B) Firms produce differentiated products. 
C) New firms can easily enter the market. 
D) There are only a few very large firms producing all output in the market. 
A) Individual firms have the power to set prices. 
B) Firms produce differentiated products. 
C) New firms can easily enter the market. 
D) There are only a few very large firms producing all output in the market.

Question 5

Knowing the number of firms in a market is the only information needed to identify the structure of that market.

Accepted Answer

A) True 
 B)False

Question 6

In the short run,perfectly competitive firms

Accepted Answer

A) always earn an economic profit 
B) never earn an economic profit 
C) always invest more in order to earn more 
D) never suffer an economic loss 
E) can earn an economic profit 
A) always earn an economic profit 
B) never earn an economic profit 
C) always invest more in order to earn more 
D) never suffer an economic loss 
E) can earn an economic profit

Question 7

The perfectly competitive firm shown in Figure 9-6 is currently producing 80 units of output.To maximize profit (or minimize loss),the firm should

Accepted Answer

A) increase output to 180 units 
B) not change its output level 
C) raise its price and hold output constant 
D) raise its price and raise output 
E) increase output to 140 units 
A) increase output to 180 units 
B) not change its output level 
C) raise its price and hold output constant 
D) raise its price and raise output 
E) increase output to 140 units

Question 8

Figure 9-21
  
-If the perfectly competitive firm in Figure 9-21 is maximizing profits,it is currently earning profits of

Accepted Answer

A) $500. 
B) $300. 
C) $660. 
D) $2200 
A) $500. 
B) $300. 
C) $660. 
D) $2200

Question 9

If average cost rises as a firm increases its output level,

Accepted Answer

A) profits are not being maximized 
B) marginal cost is greater than average cost 
C) profits are maximized 
D) marginal revenue is positive 
E) total cost is minimized 
A) profits are not being maximized 
B) marginal cost is greater than average cost 
C) profits are maximized 
D) marginal revenue is positive 
E) total cost is minimized

Question 10

All of the following conditions,except one,are satisfied when a perfectly competitive market is in short-run equilibrium.Which is the exception?

Accepted Answer

A) No firm is suffering an economic loss. 
B) Each buyer purchases the quantity he wants at the market price. 
C) Each seller produces the quantity she wants at the market price. 
D) Suppliers want to sell the same quantity that buyers want to purchase. 
E) The market coordinates the independent decisions of all the participants. 
A) No firm is suffering an economic loss. 
B) Each buyer purchases the quantity he wants at the market price. 
C) Each seller produces the quantity she wants at the market price. 
D) Suppliers want to sell the same quantity that buyers want to purchase. 
E) The market coordinates the independent decisions of all the participants.

The demand curve facing a perfectly competitive firm is

As new firms enter a market,the equilibrium price will

Under perfect competition,

Which of the following is a characteristic of perfect competition?

Knowing the number of firms in a market is the only information needed to identify the structure of that market.

In the short run,perfectly competitive firms

The perfectly competitive firm shown in Figure 9-6 is currently producing 80 units of output.To maximize profit (or minimize loss),the firm should

Figure 9-21 -If the perfectly competitive firm in Figure 9-21 is maximizing profits,it is currently earning profits of

If average cost rises as a firm increases its output level,

All of the following conditions,except one,are satisfied when a perfectly competitive market is in short-run equilibrium.Which is the exception?

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

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Exam 9: Perfect Competition

The demand curve facing a perfectly competitive firm is

As new firms enter a market,the equilibrium price will

Under perfect competition,

Which of the following is a characteristic of perfect competition?

Knowing the number of firms in a market is the only information needed to identify the structure of that market.

In the short run,perfectly competitive firms

The perfectly competitive firm shown in Figure 9-6 is currently producing 80 units of output.To maximize profit (or minimize loss),the firm should

Figure 9-21 -If the perfectly competitive firm in Figure 9-21 is maximizing profits,it is currently earning profits of

If average cost rises as a firm increases its output level,

All of the following conditions,except one,are satisfied when a perfectly competitive market is in short-run equilibrium.Which is the exception?

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