Question 1

The number of sellers in an industry,in part,defines its market

Accepted Answer

A) performance 
B) standard 
C) demand curve 
D) structure 
E) profile 
A) performance 
B) standard 
C) demand curve 
D) structure 
E) profile

Question 2

When marginal revenue equals price for all levels of output,the firm is operating in a perfectly competitive market.

Accepted Answer

A) True 
 B)False

Question 3

-Figure 9-6 shows the marginal cost and average total cost curves for a perfectly competitive firm.This firm will

Accepted Answer

A) earn an economic profit 
B) suffer an economic loss in this long-run situation 
C) suffer an economic loss in the short run and close 
D) break even if it expands to 180 units of output 
E) suffer an economic loss and continue producing in the short run 
A) earn an economic profit 
B) suffer an economic loss in this long-run situation 
C) suffer an economic loss in the short run and close 
D) break even if it expands to 180 units of output 
E) suffer an economic loss and continue producing in the short run

Question 4

In the short run in perfect competition,

Accepted Answer

A) each firm can sell whatever quantity it wishes to sell at the market price 
B) the market demand curve cannot shift 
C) new firms will enter the market if existing firms are earning economic profits 
D) new firms will enter the market if existing firms are earning normal profits 
E) existing firms will exit the market if they are suffering losses 
A) each firm can sell whatever quantity it wishes to sell at the market price 
B) the market demand curve cannot shift 
C) new firms will enter the market if existing firms are earning economic profits 
D) new firms will enter the market if existing firms are earning normal profits 
E) existing firms will exit the market if they are suffering losses

Question 5

In the long run,a typical perfectly competitive firm will produce at the minimum point of its long-run average total cost curve and the minimum point of its short-run average total cost curve.

Accepted Answer

A) True 
 B)False

Question 6

For the perfectly competitive firm shown in Figure 9-6,

Accepted Answer

A) profit rises when the firm raises its price and lowers its output 
B) the profit-maximizing output level is 180 units 
C) an economic loss occurs at the profit-maximizing output level 
D) the profit-maximizing output level is 100 units 
E) the firm will earn short-run profits 
A) profit rises when the firm raises its price and lowers its output 
B) the profit-maximizing output level is 180 units 
C) an economic loss occurs at the profit-maximizing output level 
D) the profit-maximizing output level is 100 units 
E) the firm will earn short-run profits

Question 7

Flora's Flowers operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $10,AVC = $5,and the price per unit is $15.In this situation,

Accepted Answer

A) Flora earns positive profits in the short run 
B) Flora will shut down in the short run 
C) Flora's supply curve will shift to the left 
D) Flora's supply curve will shift to the right 
E) the market price will rise in the long run 
A) Flora earns positive profits in the short run 
B) Flora will shut down in the short run 
C) Flora's supply curve will shift to the left 
D) Flora's supply curve will shift to the right 
E) the market price will rise in the long run

Question 8

In the long run in a competitive market,

Accepted Answer

A) existing firms can increase their plant size,and new firms can enter the market 
B) existing firms can increase their plant size,but the number of firms is the market is fixed 
C) new firms can enter the market,but existing firms cannot vary their plant size 
D) new firms can enter the market,but only if existing firms decrease their plant size in the short run 
E) existing firms can increase their plant size,only if some other firms exit 
A) existing firms can increase their plant size,and new firms can enter the market 
B) existing firms can increase their plant size,but the number of firms is the market is fixed 
C) new firms can enter the market,but existing firms cannot vary their plant size 
D) new firms can enter the market,but only if existing firms decrease their plant size in the short run 
E) existing firms can increase their plant size,only if some other firms exit

Question 9

In the long run,the movement of firms into and out of a perfectly competitive market will influence price by

Accepted Answer

A) shifting the market demand curve 
B) shifting the market supply curve 
C) making the market supply curve less elastic 
D) making the market demand curve less elastic 
E) shifting the supply curve for each firm in the market 
A) shifting the market demand curve 
B) shifting the market supply curve 
C) making the market supply curve less elastic 
D) making the market demand curve less elastic 
E) shifting the supply curve for each firm in the market

Question 10

If average variable cost exceeds price for a perfectly competitive firm in the short run,then it could increase profits by raising its price.

Accepted Answer

A) True 
 B)False

Question 11

If new firms are currently entering a perfectly competitive market,which of the following is true?

Accepted Answer

A) Existing firms are losing money. 
B) Existing firms are earning positive economic profits. 
C) Existing firms are just breaking even. 
D) Impossible to predict. 
A) Existing firms are losing money. 
B) Existing firms are earning positive economic profits. 
C) Existing firms are just breaking even. 
D) Impossible to predict.

Question 12

In the long run,a perfectly competitive firm earn _______ economic profits.

Accepted Answer

A) positive. 
B) negative. 
C) zero. 
D) positive or negative. 
A) positive. 
B) negative. 
C) zero. 
D) positive or negative.

Question 13

Tommy's Tires operates in a perfectly competitive market.If tires sell for $50 each and ATC = $40 per tire at the profit-maximizing output level,then in the long run

Accepted Answer

A) more firms will enter the market 
B) some firms will exit from the market 
C) the equilibrium price per tire will rise 
D) average total costs must fall 
E) marginal revenue will rise 
A) more firms will enter the market 
B) some firms will exit from the market 
C) the equilibrium price per tire will rise 
D) average total costs must fall 
E) marginal revenue will rise

Question 14

If a perfectly competitive firm cannot avoid economic losses,it should continue to operate in the short run as long as

Accepted Answer

A) marginal revenue exceeds average fixed cost 
B) price exceeds average total cost 
C) the market price exceeds average total cost 
D) the marginal revenue is less than the average variable cost 
E) price exceeds average variable cost 
A) marginal revenue exceeds average fixed cost 
B) price exceeds average total cost 
C) the market price exceeds average total cost 
D) the marginal revenue is less than the average variable cost 
E) price exceeds average variable cost

Question 15

In an increasing cost industry,the long-run supply curve is

Accepted Answer

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

Question 16

Which of the following is true regarding the cost curves faced by a firm?

Accepted Answer

A) when MC > ATC,AVC must be falling 
B) when MC > AVC,ATC must be rising 
C) when MC > ATC,ATC must be rising 
D) MC and ATC are the same for a perfectly competitive firm 
E) when MC is a horizontal line,price is constant 
A) when MC > ATC,AVC must be falling 
B) when MC > AVC,ATC must be rising 
C) when MC > ATC,ATC must be rising 
D) MC and ATC are the same for a perfectly competitive firm 
E) when MC is a horizontal line,price is constant

Question 17

The firm earns an economic profit whenever

Accepted Answer

A) price is less than average total cost 
B) marginal revenue exceeds total revenue 
C) average variable cost exceeds total revenue 
D) marginal cost minus average cost is positive 
E) price is greater than average total cost 
A) price is less than average total cost 
B) marginal revenue exceeds total revenue 
C) average variable cost exceeds total revenue 
D) marginal cost minus average cost is positive 
E) price is greater than average total cost

Question 18

In short-run equilibrium in a perfectly competitive market,

Accepted Answer

A) the price varies along the market supply curve 
B) each consumer can buy whatever quantity he wishes to buy at the market price 
C) the price varies along the market demand curve 
D) the market demand curve is horizontal 
E) the market demand curve is vertical 
A) the price varies along the market supply curve 
B) each consumer can buy whatever quantity he wishes to buy at the market price 
C) the price varies along the market demand curve 
D) the market demand curve is horizontal 
E) the market demand curve is vertical

Question 19

In a perfectly competitive market,

Accepted Answer

A) each firm faces a perfectly elastic supply curve 
B) each consumer faces a perfect elastic demand curve 
C) the market sums up the buying and selling preferences and determines the market price 
D) the market price is determined by firms and the market quantity is determined by consumers 
E) price equals marginal cost equals average total cost in the short run 
A) each firm faces a perfectly elastic supply curve 
B) each consumer faces a perfect elastic demand curve 
C) the market sums up the buying and selling preferences and determines the market price 
D) the market price is determined by firms and the market quantity is determined by consumers 
E) price equals marginal cost equals average total cost in the short run

Question 20

In a perfectly competitive market,the first firm to adopt a new cost-saving technological advance will

Accepted Answer

A) buy more resources 
B) suffer an economic loss 
C) earn an economic profit until other competitors adopt the technology 
D) export to foreign markets 
E) supply low income neighborhoods 
A) buy more resources 
B) suffer an economic loss 
C) earn an economic profit until other competitors adopt the technology 
D) export to foreign markets 
E) supply low income neighborhoods

The number of sellers in an industry,in part,defines its market

When marginal revenue equals price for all levels of output,the firm is operating in a perfectly competitive market.

-Figure 9-6 shows the marginal cost and average total cost curves for a perfectly competitive firm.This firm will

In the short run in perfect competition,

In the long run,a typical perfectly competitive firm will produce at the minimum point of its long-run average total cost curve and the minimum point of its short-run average total cost curve.

For the perfectly competitive firm shown in Figure 9-6,

Flora's Flowers operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $10,AVC = $5,and the price per unit is $15.In this situation,

In the long run in a competitive market,

In the long run,the movement of firms into and out of a perfectly competitive market will influence price by

If average variable cost exceeds price for a perfectly competitive firm in the short run,then it could increase profits by raising its price.

If new firms are currently entering a perfectly competitive market,which of the following is true?

In the long run,a perfectly competitive firm earn _______ economic profits.

Tommy's Tires operates in a perfectly competitive market.If tires sell for $50 each and ATC = $40 per tire at the profit-maximizing output level,then in the long run

If a perfectly competitive firm cannot avoid economic losses,it should continue to operate in the short run as long as

In an increasing cost industry,the long-run supply curve is

Which of the following is true regarding the cost curves faced by a firm?

The firm earns an economic profit whenever

In short-run equilibrium in a perfectly competitive market,

In a perfectly competitive market,

In a perfectly competitive market,the first firm to adopt a new cost-saving technological advance will

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

The number of sellers in an industry,in part,defines its market

When marginal revenue equals price for all levels of output,the firm is operating in a perfectly competitive market.

-Figure 9-6 shows the marginal cost and average total cost curves for a perfectly competitive firm.This firm will

In the short run in perfect competition,

In the long run,a typical perfectly competitive firm will produce at the minimum point of its long-run average total cost curve and the minimum point of its short-run average total cost curve.

For the perfectly competitive firm shown in Figure 9-6,

Flora's Flowers operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $10,AVC = $5,and the price per unit is $15.In this situation,

In the long run in a competitive market,

In the long run,the movement of firms into and out of a perfectly competitive market will influence price by

If average variable cost exceeds price for a perfectly competitive firm in the short run,then it could increase profits by raising its price.

If new firms are currently entering a perfectly competitive market,which of the following is true?

In the long run,a perfectly competitive firm earn _______ economic profits.

Tommy's Tires operates in a perfectly competitive market.If tires sell for $50 each and ATC = $40 per tire at the profit-maximizing output level,then in the long run

If a perfectly competitive firm cannot avoid economic losses,it should continue to operate in the short run as long as

In an increasing cost industry,the long-run supply curve is

Which of the following is true regarding the cost curves faced by a firm?

The firm earns an economic profit whenever

In short-run equilibrium in a perfectly competitive market,

In a perfectly competitive market,

In a perfectly competitive market,the first firm to adopt a new cost-saving technological advance will

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