Question 1

Exhibit
  
-Refer to Exhibit 12.7. In the short-run, if the market price is $10, the competitive firm will earn:?

Accepted Answer

A) positive economic profits. 
B) zero economic profits. 
C) economic losses but will not shut down. 
D) economic losses and will shut down. 
A) positive economic profits. 
B) zero economic profits. 
C) economic losses but will not shut down. 
D) economic losses and will shut down. B

Question 2

Exhibit
  
-Refer to Figure 12.7. At what price would other firm be encouraged to enter this market?

Accepted Answer

A) any price greater than $5. 
B) any price greater than $6. 
C) any price greater than $7. 
D) any price greater than $10. 
A) any price greater than $5. 
B) any price greater than $6. 
C) any price greater than $7. 
D) any price greater than $10. D

Question 3

Assume a perfectly competitive firm sells its output for $150 per unit. At its current 2,000 units of output, marginal cost is $140 and increasing, and average variable cost is $143. Assuming it wants to maximize its profits, it should:?

Accepted Answer

A) increase output. 
B) decrease output, but not shut down. 
C) maintain its current output rate. 
D) shut down. 
A) increase output. 
B) decrease output, but not shut down. 
C) maintain its current output rate. 
D) shut down. A

Question 4

Exhibit
  
-Refer to Exhibit. In Graph B, the market demand has decreased from d0 to d1, and as a result:

Accepted Answer

A) both the market price and the price of the price-taking firm have increased to $5. 
B) both the market price and the price of the price-taking firm have fallen to $4. 
C) the quantity of goods transacted in the market has fallen from Q1 to Q0. 
D) at the new equilibrium price, the firm will be unable to sell any of its output. 
A) both the market price and the price of the price-taking firm have increased to $5. 
B) both the market price and the price of the price-taking firm have fallen to $4. 
C) the quantity of goods transacted in the market has fallen from Q1 to Q0. 
D) at the new equilibrium price, the firm will be unable to sell any of its output.

Question 5

​Exhibit
  
-Refer to Exhibit. Competitive firms will operate at an economic loss but not shut down in the short run if the market price?

Accepted Answer

A) is greater than $3. 
B) is less than $2 but greater than $1. 
C) is less than $3 but greater than $2. 
D) Is less than $1. 
A) is greater than $3. 
B) is less than $2 but greater than $1. 
C) is less than $3 but greater than $2. 
D) Is less than $1.

Question 6

Exhibit
  
-Refer to Exhibit. When market price is $15, a profit-maximizing firm's short-run profits are:?

Accepted Answer

A) $0 
B) $45 
C) $12 
D) $33 
A) $0 
B) $45 
C) $12 
D) $33

Question 7

​Exhibit
  
-Refer to Exhibit. When market price is $2, a profit-maximizing competitive firm's profit is?

Accepted Answer

A) $12.50. 
B) $2.25. 
C) $3. 
D) $0. 
A) $12.50. 
B) $2.25. 
C) $3. 
D) $0.

Question 8

Exhibit
  
-Refer to Exhibit. Total revenue for the firm in Graph A equals:?

Accepted Answer

A) $40. 
B) $80. 
C) $320. 
D) $400. 
A) $40. 
B) $80. 
C) $320. 
D) $400.

Question 9

Exhibit
  
-Refer to Exhibit 12.7. In the short-run, if the market price is less than $5, the competitive firm will earn:?

Accepted Answer

A) positive economic profits. 
B) zero economic profits. 
C) economic losses but will not shut down. 
D) economic losses and will shut down. 
A) positive economic profits. 
B) zero economic profits. 
C) economic losses but will not shut down. 
D) economic losses and will shut down.

Question 10

Exhibit
  
-Refer to Exhibit. In Graph A, the market demand has increased from d0 to d1, and as a result:

Accepted Answer

A) both the market price and the price of the price-taking firm have risen to $6. 
B) both the market price and the price of the price-taking firm have fallen to $5. 
C) the quantity of goods transacted in the market has fallen from Q1 to Q0. 
D) at the new equilibrium price, the firm will be unable to sell any of its output. 
A) both the market price and the price of the price-taking firm have risen to $6. 
B) both the market price and the price of the price-taking firm have fallen to $5. 
C) the quantity of goods transacted in the market has fallen from Q1 to Q0. 
D) at the new equilibrium price, the firm will be unable to sell any of its output.

Question 11

Exhibit
  
-Refer to Exhibit. In the short run, if the market price falls below ____, the firm should shut down.

Accepted Answer

A) $60 
B) $45 
C) $30 
D) $10 
A) $60 
B) $45 
C) $30 
D) $10

Question 12

Exhibit
  
-Refer to Exhibit. Suppose the market price equals $88 and the firm is currently producing 600 units of output. In this situation, the firm:?

Accepted Answer

A) is maximizing profit. 
B) should increase production of output in order to maximize profit. 
C) should decrease production of output in order to maximize profit. 
D) should shut down in order to minimize economic losses. 
A) is maximizing profit. 
B) should increase production of output in order to maximize profit. 
C) should decrease production of output in order to maximize profit. 
D) should shut down in order to minimize economic losses.

Question 13

Exhibit
  
-Refer to Exhibit. In the short-run, if the market price is higher than $10, the competitive firm will earn:

Accepted Answer

A) positive economic profits. 
B) zero economic profits. 
C) losses but will not shut down. 
D) losses and will shut down. 
A) positive economic profits. 
B) zero economic profits. 
C) losses but will not shut down. 
D) losses and will shut down.

Question 14

A perfectly competitive, increasing cost industry is initially in long run equilibrium. Then, there is an increase in demand. Compared with the initial equilibrium, once the new long run equilibrium is reached:?

Accepted Answer

A) price will be higher and total output will be greater than before. 
B) price will be the same and total output will be greater than before. 
C) price will be lower and total output will be greater than before. 
D) price will be higher, and therefore total output will be smaller than before. 
A) price will be higher and total output will be greater than before. 
B) price will be the same and total output will be greater than before. 
C) price will be lower and total output will be greater than before. 
D) price will be higher, and therefore total output will be smaller than before.

Question 15

Exhibit
  
-Refer to Exhibit. When the market price equals $54, the firm:?should continue operating temporarily despite an economic loss because the firm is able to cover a portion of its fixed costs.

Accepted Answer

A) should shut down. 
B) should continue operating temporarily despite an economic loss because the firm is able to cover all of its variable costs. 
C) should continue operating temporarily despite an economic loss because the firm is able to cover a portion of its fixed costs. 
D) should continue operating because the firm is making a profit. 
A) should shut down. 
B) should continue operating temporarily despite an economic loss because the firm is able to cover all of its variable costs. 
C) should continue operating temporarily despite an economic loss because the firm is able to cover a portion of its fixed costs. 
D) should continue operating because the firm is making a profit.

Question 16

Exhibit
  
-Refer to Exhibit. The lowest price at which the firm can earn at least zero economic profit is:?

Accepted Answer

A) $60. 
B) $45. 
C) $30. 
D) $10. 
A) $60. 
B) $45. 
C) $30. 
D) $10.

Question 17

Exhibit
The following table shows how the total cost of producing canisters of peanuts varies with output and capital in the long run in a perfectly competitive industry.
  
-Refer to Exhibit. What levels of capital (K=1, K=2, or K=3) would the firm choose in the long run for producing three canisters and five canisters of peanuts per hour, respectively?​

Accepted Answer

The firm would choose a level of capital

Question 18

​Exhibit
  
-Refer to Exhibit. When the market price is $2, a competitive profit-maximizing firm's total revenue is:?

Accepted Answer

A) $21. 
B) $6. 
C) $3. 
D) $12.50. 
A) $21. 
B) $6. 
C) $3. 
D) $12.50.

Question 19

Exhibit
The figure shows the price, marginal cost, and average cost curves of a perfectly competitive firm.
  
-Refer to Exhibit. The firm depicted above should:

Accepted Answer

A) shut down in order to minimize losses. 
B) keep operating in the short run in order to minimize losses, since price exceeds average variable cost. 
C) keep operating in the short run in order to minimize losses, since price exceeds average total cost. 
D) decrease output to 30 units, since marginal revenue exceeds marginal cost by the greatest dollar amount at that level of output. 
A) shut down in order to minimize losses. 
B) keep operating in the short run in order to minimize losses, since price exceeds average variable cost. 
C) keep operating in the short run in order to minimize losses, since price exceeds average total cost. 
D) decrease output to 30 units, since marginal revenue exceeds marginal cost by the greatest dollar amount at that level of output.

Question 20

Exhibit
  
-Refer to Exhibit. Graph B exhibits a price-taking firm:

Accepted Answer

A) which will lose money when the market price equals $4.90. 
B) which will make an economic profit when the market price equals $4.90. 
C) which will break even when the market price equals $4.90. 
D) which will shut down when the market price equals $4.90. 
A) which will lose money when the market price equals $4.90. 
B) which will make an economic profit when the market price equals $4.90. 
C) which will break even when the market price equals $4.90. 
D) which will shut down when the market price equals $4.90.

Exhibit -Refer to Exhibit 12.7. In the short-run, if the market price is $10, the competitive firm will earn:?

Exhibit -Refer to Figure 12.7. At what price would other firm be encouraged to enter this market?

Assume a perfectly competitive firm sells its output for $150 per unit. At its current 2,000 units of output, marginal cost is $140 and increasing, and average variable cost is $143. Assuming it wants to maximize its profits, it should:?

Exhibit -Refer to Exhibit. In Graph B, the market demand has decreased from d₀ to d₁, and as a result:

Exhibit -Refer to Exhibit. Competitive firms will operate at an economic loss but not shut down in the short run if the market price?

Exhibit -Refer to Exhibit. When market price is $15, a profit-maximizing firm's short-run profits are:?

Exhibit -Refer to Exhibit. When market price is $2, a profit-maximizing competitive firm's profit is?

Exhibit -Refer to Exhibit. Total revenue for the firm in Graph A equals:?

Exhibit -Refer to Exhibit 12.7. In the short-run, if the market price is less than $5, the competitive firm will earn:?

Exhibit -Refer to Exhibit. In Graph A, the market demand has increased from d₀ to d₁, and as a result:

Exhibit -Refer to Exhibit. In the short run, if the market price falls below ____, the firm should shut down.

Exhibit -Refer to Exhibit. Suppose the market price equals $88 and the firm is currently producing 600 units of output. In this situation, the firm:?

Exhibit -Refer to Exhibit. In the short-run, if the market price is higher than $10, the competitive firm will earn:

A perfectly competitive, increasing cost industry is initially in long run equilibrium. Then, there is an increase in demand. Compared with the initial equilibrium, once the new long run equilibrium is reached:?

Exhibit -Refer to Exhibit. When the market price equals $54, the firm:?should continue operating temporarily despite an economic loss because the firm is able to cover a portion of its fixed costs.

Exhibit -Refer to Exhibit. The lowest price at which the firm can earn at least zero economic profit is:?

Exhibit -Refer to Exhibit. When the market price is $2, a competitive profit-maximizing firm's total revenue is:?

Exhibit The figure shows the price, marginal cost, and average cost curves of a perfectly competitive firm. -Refer to Exhibit. The firm depicted above should:

Exhibit -Refer to Exhibit. Graph B exhibits a price-taking firm:

Market Failure, Market Efficiency and Welfare

Elasticities

Market in Motion and Price Controls

Demand Supply and Market Equilibrium

Economics Eight Powerful Ideas and the Role and Method of Economics

International Finance

International Trade, Income Poverty and Health Care

The Markets for Labor Capital and Land

Oligopoly and Strategic Behavior

Monopolistic Competition, Product Differentiation, Monopoly and Antitrust

The Firm Production and Costs

Consumer Choice Theory

Filters

Exam 11: Firms in Perfectly Competitive Markets

Exhibit -Refer to Exhibit 12.7. In the short-run, if the market price is $10, the competitive firm will earn:?

Exhibit -Refer to Figure 12.7. At what price would other firm be encouraged to enter this market?

Assume a perfectly competitive firm sells its output for $150 per unit. At its current 2,000 units of output, marginal cost is $140 and increasing, and average variable cost is $143. Assuming it wants to maximize its profits, it should:?

Exhibit -Refer to Exhibit. In Graph B, the market demand has decreased from d0 to d1, and as a result:

​Exhibit -Refer to Exhibit. Competitive firms will operate at an economic loss but not shut down in the short run if the market price?

Exhibit -Refer to Exhibit. When market price is $15, a profit-maximizing firm's short-run profits are:?

​Exhibit -Refer to Exhibit. When market price is $2, a profit-maximizing competitive firm's profit is?

Exhibit -Refer to Exhibit. Total revenue for the firm in Graph A equals:?

Exhibit -Refer to Exhibit 12.7. In the short-run, if the market price is less than $5, the competitive firm will earn:?

Exhibit -Refer to Exhibit. In Graph A, the market demand has increased from d0 to d1, and as a result:

Exhibit -Refer to Exhibit. In the short run, if the market price falls below ____, the firm should shut down.

Exhibit -Refer to Exhibit. Suppose the market price equals $88 and the firm is currently producing 600 units of output. In this situation, the firm:?

Exhibit -Refer to Exhibit. In the short-run, if the market price is higher than $10, the competitive firm will earn:

A perfectly competitive, increasing cost industry is initially in long run equilibrium. Then, there is an increase in demand. Compared with the initial equilibrium, once the new long run equilibrium is reached:?

Exhibit -Refer to Exhibit. When the market price equals $54, the firm:?should continue operating temporarily despite an economic loss because the firm is able to cover a portion of its fixed costs.

Exhibit -Refer to Exhibit. The lowest price at which the firm can earn at least zero economic profit is:?

​Exhibit -Refer to Exhibit. When the market price is $2, a competitive profit-maximizing firm's total revenue is:?

Exhibit The figure shows the price, marginal cost, and average cost curves of a perfectly competitive firm. -Refer to Exhibit. The firm depicted above should:

Exhibit -Refer to Exhibit. Graph B exhibits a price-taking firm:

Market Failure, Market Efficiency and Welfare

Elasticities

Market in Motion and Price Controls

Demand Supply and Market Equilibrium

Economics Eight Powerful Ideas and the Role and Method of Economics

International Finance

International Trade, Income Poverty and Health Care

The Markets for Labor Capital and Land

Oligopoly and Strategic Behavior

Monopolistic Competition, Product Differentiation, Monopoly and Antitrust

The Firm Production and Costs

Consumer Choice Theory

Filters

Exhibit -Refer to Exhibit. In Graph B, the market demand has decreased from d₀ to d₁, and as a result:

Exhibit -Refer to Exhibit. Competitive firms will operate at an economic loss but not shut down in the short run if the market price?

Exhibit -Refer to Exhibit. When market price is $2, a profit-maximizing competitive firm's profit is?

Exhibit -Refer to Exhibit. In Graph A, the market demand has increased from d₀ to d₁, and as a result:

Exhibit -Refer to Exhibit. When the market price is $2, a competitive profit-maximizing firm's total revenue is:?