Question 1

In a decreasing-cost industry,the long-run industry supply curve is

Accepted Answer

A) horizontal 
B) vertical 
C) upward sloping 
D) downward sloping 
E) the sum of the individual firm's marginal cost curves 
A) horizontal 
B) vertical 
C) upward sloping 
D) downward sloping 
E) the sum of the individual firm's marginal cost curves

Question 2

-Figure 9-1 shows the marginal cost and average total cost curves for a perfectly competitive firm.If the market price is $10,and the firm produces more than 200

Accepted Answer

A) the firm earns less profit per unit than if it produced 200 but more total profit. 
B) the firm earns more profit per unit than if it produced 200 and more total profit. 
C) the firm earns less profit per unit than if it produced 200 and less total profit. 
D) the firm earns more profit per unit than if it produced 200 but may make a loss. 
E) the firm will instantly go from making a profit to making a loss 
A) the firm earns less profit per unit than if it produced 200 but more total profit. 
B) the firm earns more profit per unit than if it produced 200 and more total profit. 
C) the firm earns less profit per unit than if it produced 200 and less total profit. 
D) the firm earns more profit per unit than if it produced 200 but may make a loss. 
E) the firm will instantly go from making a profit to making a loss

Question 3

In a perfectly competitive market,the good or service cannot differ substantially among sellers.

Accepted Answer

A) True 
 B)False

Question 4

-Figure 9-2 shows the total revenue and total cost data for a perfectly competitive firm.The marginal revenue of producing the sixth unit of output is

Accepted Answer

A) $0 
B) less than $20 
C) $20 
D) more than $20 
E) $120 
A) $0 
B) less than $20 
C) $20 
D) more than $20 
E) $120

Question 5

In the long run in a perfectly competitive market,economic profit or loss is

Accepted Answer

A) the main determinant of total cost 
B) the main driving force determining consumer preferences 
C) the basis of all government policy 
D) the main driving force behind economic change 
E) expected to persist indefinitely 
A) the main determinant of total cost 
B) the main driving force determining consumer preferences 
C) the basis of all government policy 
D) the main driving force behind economic change 
E) expected to persist indefinitely

Question 6

-The perfectly competitive firm represented in Figure 9-10 has a short-run supply curve that follows the

Accepted Answer

A) marginal cost curve 
B) vertical axis for prices less than $4.00 and follows the marginal cost curve for prices above $4.00 
C) vertical axis for prices less than $2.50 and follows the marginal cost curve for prices above $2.50 
D) vertical axis for prices less than $5.50 and follows the marginal cost curve for prices above $5.50 
E) horizontal axis for quantities less than 50 and follows the marginal cost curve for quantities above 50 
A) marginal cost curve 
B) vertical axis for prices less than $4.00 and follows the marginal cost curve for prices above $4.00 
C) vertical axis for prices less than $2.50 and follows the marginal cost curve for prices above $2.50 
D) vertical axis for prices less than $5.50 and follows the marginal cost curve for prices above $5.50 
E) horizontal axis for quantities less than 50 and follows the marginal cost curve for quantities above 50

Question 7

In the long run under perfect competition,all firms in the same market

Accepted Answer

A) earn the same money profit 
B) have the same opportunity costs 
C) earn the same economic profit 
D) face the same explicit costs 
E) earn the same money profit and the same economic profit 
A) earn the same money profit 
B) have the same opportunity costs 
C) earn the same economic profit 
D) face the same explicit costs 
E) earn the same money profit and the same economic profit

Question 8

In long-run equilibrium,every perfectly competitive firm

Accepted Answer

A) maximizes its output 
B) chooses its plant size and output level to operate at minimum long-run marginal cost 
C) chooses its plant size and output level to operate at minimum long-run average total cost 
D) earns an economic profit 
E) suffers an economic loss 
A) maximizes its output 
B) chooses its plant size and output level to operate at minimum long-run marginal cost 
C) chooses its plant size and output level to operate at minimum long-run average total cost 
D) earns an economic profit 
E) suffers an economic loss

Question 9

All of the following are characteristics of a perfectly competitive market,except one.Which is the exception?

Accepted Answer

A) a large number of sellers 
B) a standardized product 
C) no barriers to entry 
D) sellers can easily exit the market 
E) an intensive rivalry among the sellers 
A) a large number of sellers 
B) a standardized product 
C) no barriers to entry 
D) sellers can easily exit the market 
E) an intensive rivalry among the sellers

Question 10

-Figure 9-4 shows marginal cost for a firm in a perfectly competitive market.Suppose that the market price is $20.What is the profit-maximizing level of output?

Accepted Answer

A) 0 
B) 1 
C) 4 
D) 5 
E) 6 
A) 0 
B) 1 
C) 4 
D) 5 
E) 6

Question 11

In the short run in a perfectly competitive industry,

Accepted Answer

A) each firm's supply curve is horizontal,but the market supply curve is upward sloping 
B) the marginal cost curve equals the marginal revenue curve 
C) the market supply curve is upward sloping because each firm's supply curve is upward sloping 
D) the market demand curve is the sum of each consumer's marginal revenue curve 
E) each firm earns only a normal profit 
A) each firm's supply curve is horizontal,but the market supply curve is upward sloping 
B) the marginal cost curve equals the marginal revenue curve 
C) the market supply curve is upward sloping because each firm's supply curve is upward sloping 
D) the market demand curve is the sum of each consumer's marginal revenue curve 
E) each firm earns only a normal profit

Question 12

The distinguishing characteristics of different market structures include

Accepted Answer

A) how frequently the product is purchased 
B) the extent of capitalization in the industry 
C) the presence or absence of technological innovation 
D) the presence or absence of collusion 
E) both the number of sellers and the number of buyers 
A) how frequently the product is purchased 
B) the extent of capitalization in the industry 
C) the presence or absence of technological innovation 
D) the presence or absence of collusion 
E) both the number of sellers and the number of buyers

Question 13

If expansion of an industry's output causes a downward shift of firms' average total cost curves,

Accepted Answer

A) each firm earns a long-run economic profit 
B) all of the following are correct 
C) there will be long-run economic profits 
D) it is a decreasing-cost industry 
E) it is an increasing-cost industry 
A) each firm earns a long-run economic profit 
B) all of the following are correct 
C) there will be long-run economic profits 
D) it is a decreasing-cost industry 
E) it is an increasing-cost industry

Question 14

In a perfectly competitive market,the equilibrium price

Accepted Answer

A) is determined by all the buyers in the market but no single buyer is able to influence it 
B) is determined by all the sellers in the market but no single seller is able to influence it 
C) adjusts until the quantity supplied by all sellers is equal to the quantity demanded by all buyers 
D) is not influenced by the cost structure of the firms in the market 
E) is not influenced by the preferences of the consumers in the market 
A) is determined by all the buyers in the market but no single buyer is able to influence it 
B) is determined by all the sellers in the market but no single seller is able to influence it 
C) adjusts until the quantity supplied by all sellers is equal to the quantity demanded by all buyers 
D) is not influenced by the cost structure of the firms in the market 
E) is not influenced by the preferences of the consumers in the market

Question 15

In a perfectly competitive,decreasing-cost industry,the long-run market supply curve slopes downward.

Accepted Answer

A) True 
 B)False

Question 16

If a firm is operating in a perfectly competitive market in which the market price equals $12,then its

Accepted Answer

A) marginal revenue is $12 
B) marginal revenue is less than $12 
C) marginal revenue is greater than $12 
D) marginal cost is less than $12 
E) marginal cost is greater than $12 
A) marginal revenue is $12 
B) marginal revenue is less than $12 
C) marginal revenue is greater than $12 
D) marginal cost is less than $12 
E) marginal cost is greater than $12

Question 17

Which of the following is always true for a perfectly competitive firm?

Accepted Answer

A) Marginal revenue is below price. 
B) Marginal revenue exceeds price. 
C) The market demand curve is a horizontal line. 
D) Price equals marginal revenue. 
E) The market supply curve is a horizontal line. 
A) Marginal revenue is below price. 
B) Marginal revenue exceeds price. 
C) The market demand curve is a horizontal line. 
D) Price equals marginal revenue. 
E) The market supply curve is a horizontal line.

Question 18

Figure 9-22
  
-The perfectly competitive firm in Figure 9-22 faces the same costs and demand as other firms in this market.Which of the following will occur in this market?

Accepted Answer

A) Some firms will exit. 
B) Some firms will enter. 
C) The number of firms will remain constant. 
D) Some firms will go bankrupt. 
A) Some firms will exit. 
B) Some firms will enter. 
C) The number of firms will remain constant. 
D) Some firms will go bankrupt.

Question 19

In the long run,an entrepreneur who owns a perfectly competitive firm will earn no income from that firm.

Accepted Answer

A) True 
 B)False

Question 20

The entry of new firms into a perfectly competitive market in the long run is most likely the result of

Accepted Answer

A) temporarily above-normal profit,despite the presence of barriers to entry 
B) continued above-normal profit,despite the presence of barriers to entry 
C) temporarily above-normal profit,combined with the absence of barriers to entry 
D) continued above-normal profit,combined with the absence of barriers to entry 
E) either temporarily or continued above-normal profit,despite the presence of barriers to entry 
A) temporarily above-normal profit,despite the presence of barriers to entry 
B) continued above-normal profit,despite the presence of barriers to entry 
C) temporarily above-normal profit,combined with the absence of barriers to entry 
D) continued above-normal profit,combined with the absence of barriers to entry 
E) either temporarily or continued above-normal profit,despite the presence of barriers to entry

In a decreasing-cost industry,the long-run industry supply curve is

-Figure 9-1 shows the marginal cost and average total cost curves for a perfectly competitive firm.If the market price is $10,and the firm produces more than 200

In a perfectly competitive market,the good or service cannot differ substantially among sellers.

-Figure 9-2 shows the total revenue and total cost data for a perfectly competitive firm.The marginal revenue of producing the sixth unit of output is

In the long run in a perfectly competitive market,economic profit or loss is

-The perfectly competitive firm represented in Figure 9-10 has a short-run supply curve that follows the

In the long run under perfect competition,all firms in the same market

In long-run equilibrium,every perfectly competitive firm

All of the following are characteristics of a perfectly competitive market,except one.Which is the exception?

-Figure 9-4 shows marginal cost for a firm in a perfectly competitive market.Suppose that the market price is $20.What is the profit-maximizing level of output?

In the short run in a perfectly competitive industry,

The distinguishing characteristics of different market structures include

If expansion of an industry's output causes a downward shift of firms' average total cost curves,

In a perfectly competitive market,the equilibrium price

In a perfectly competitive,decreasing-cost industry,the long-run market supply curve slopes downward.

If a firm is operating in a perfectly competitive market in which the market price equals $12,then its

Which of the following is always true for a perfectly competitive firm?

Figure 9-22 -The perfectly competitive firm in Figure 9-22 faces the same costs and demand as other firms in this market.Which of the following will occur in this market?

In the long run,an entrepreneur who owns a perfectly competitive firm will earn no income from that firm.

The entry of new firms into a perfectly competitive market in the long run is most likely the result of

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

In a decreasing-cost industry,the long-run industry supply curve is

-Figure 9-1 shows the marginal cost and average total cost curves for a perfectly competitive firm.If the market price is $10,and the firm produces more than 200

In a perfectly competitive market,the good or service cannot differ substantially among sellers.

-Figure 9-2 shows the total revenue and total cost data for a perfectly competitive firm.The marginal revenue of producing the sixth unit of output is

In the long run in a perfectly competitive market,economic profit or loss is

-The perfectly competitive firm represented in Figure 9-10 has a short-run supply curve that follows the

In the long run under perfect competition,all firms in the same market

In long-run equilibrium,every perfectly competitive firm

All of the following are characteristics of a perfectly competitive market,except one.Which is the exception?

-Figure 9-4 shows marginal cost for a firm in a perfectly competitive market.Suppose that the market price is $20.What is the profit-maximizing level of output?

In the short run in a perfectly competitive industry,

The distinguishing characteristics of different market structures include

If expansion of an industry's output causes a downward shift of firms' average total cost curves,

In a perfectly competitive market,the equilibrium price

In a perfectly competitive,decreasing-cost industry,the long-run market supply curve slopes downward.

If a firm is operating in a perfectly competitive market in which the market price equals $12,then its

Which of the following is always true for a perfectly competitive firm?

Figure 9-22 -The perfectly competitive firm in Figure 9-22 faces the same costs and demand as other firms in this market.Which of the following will occur in this market?

In the long run,an entrepreneur who owns a perfectly competitive firm will earn no income from that firm.

The entry of new firms into a perfectly competitive market in the long run is most likely the result of

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