Question 1

The following table shows the costs for a manufacturer:
  
-Refer to the above information to answer this question.What is the value of the break-even price?

Accepted Answer

A) $18. 
B) $30. 
C) $40. 
D) $42. 
E) $45. 
A) $18. 
B) $30. 
C) $40. 
D) $42. 
E) $45. D

Question 2

What is the term for the amount of revenue that will always equal the price of the product in a perfectly-competitive market?

Accepted Answer

A) Marginal price. 
B) Net revenue. 
C) Average revenue. 
D) Total revenue. 
A) Marginal price. 
B) Net revenue. 
C) Average revenue. 
D) Total revenue. C

Question 3

Suppose that at a particular output level a firm's MR = MC = $15 and its AVC = $12.Should a perfectly competitive firm shut down or continue to operate?

Accepted Answer

A firm will shut down if P < AVC.For a perfectly competitive firm,P = MR.Since MR = MC = 15,then P = 15,thus P > AVC;the firm should continue to operate.

Question 4

The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
  
-Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?

Accepted Answer

A) 0 and a loss of $500. 
B) 6 and a profit of $900. 
C) 7 and a profit of $950. 
D) 7 and a profit of $1,450. 
E) 8 and a profit of $880. 
A) 0 and a loss of $500. 
B) 6 and a profit of $900. 
C) 7 and a profit of $950. 
D) 7 and a profit of $1,450. 
E) 8 and a profit of $880.

Question 5

What is the shape of the competitive firm's supply curve?

Accepted Answer

A) Horizontal and equal to its marginal revenue curve. 
B) Horizontal and equal to its average revenue curve. 
C) Downward-sloping and equal to its marginal cost curve. 
D) Upward-sloping. 
A) Horizontal and equal to its marginal revenue curve. 
B) Horizontal and equal to its average revenue curve. 
C) Downward-sloping and equal to its marginal cost curve. 
D) Upward-sloping.

Question 6

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
  
-Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?

Accepted Answer

A) 0 and a loss of $500. 
B) 4 and a loss of $120. 
C) 5 and a loss of $100. 
D) 5 and a loss of $400. 
E) 6 and a loss of $150. 
A) 0 and a loss of $500. 
B) 4 and a loss of $120. 
C) 5 and a loss of $100. 
D) 5 and a loss of $400. 
E) 6 and a loss of $150.

Question 7

What is the name of the type of market that is dominated by a few firms?

Accepted Answer

A) Oligopoly. 
B) Monopolistic competition. 
C) Monopoly. 
D) Perfect competition. 
A) Oligopoly. 
B) Monopolistic competition. 
C) Monopoly. 
D) Perfect competition.

Question 8

The following table shows the costs for a manufacturer:
  
-Refer to the above information to answer this question.If the price of the product is $40,how much will the manufacturer produce and what will be its total profit or loss?

Accepted Answer

A) 0 and a loss of $120. 
B) 5 and a loss of $20. 
C) 5 and a profit of $15. 
D) 6 and a loss of $12. 
E) 6 and a loss of $18. 
A) 0 and a loss of $120. 
B) 5 and a loss of $20. 
C) 5 and a profit of $15. 
D) 6 and a loss of $12. 
E) 6 and a loss of $18.

Question 9

Table 8.2 shows the total variable cost for a perfectly competitive firm.
Table 8.2
   a)If the price is $5,what is the profit maximizing level of output?
b)If the price is $6,what is the profit maximizing level of output?
c)If the price is $7,what is the profit maximizing level of output?

Accepted Answer

To answer this question,total

Question 10

Assume that the following data is for a profit-maximizing manufacturer:
  
-Refer to the above information to answer this question.What is the value of the break-even price?

Accepted Answer

A) $20. 
B) $30. 
C) $40. 
D) $50. 
E) $60. 
A) $20. 
B) $30. 
C) $40. 
D) $50. 
E) $60.

Question 11

Marginal revenue is the extra income a firm receives above break-even.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following refers to the perfectly competitive firm?

Accepted Answer

A) It is a price-maker. 
B) It is a price-taker. 
C) It might be either a price-maker or a price-taker. 
D) It is neither a price-maker nor a price-taker. 
A) It is a price-maker. 
B) It is a price-taker. 
C) It might be either a price-maker or a price-taker. 
D) It is neither a price-maker nor a price-taker.

Question 13

The following table shows the costs for a manufacturer:
  
-Refer to the above information to answer this question.What is the value of the shut-down price?

Accepted Answer

A) $10. 
B) $18. 
C) $20. 
D) $40. 
E) $45. 
A) $10. 
B) $18. 
C) $20. 
D) $40. 
E) $45.

Question 14

Graph A shows the market demand and supply in a perfectly competitive market.Graph B shows the cost curves of a representative profit-maximizing firm in that industry.
  
-Refer to the above graph to answer this question.Suppose that the industry demand were to increase by 3,000 units.What will be the new equilibrium price and quantity in the industry?

Accepted Answer

A) $400 and 8,000. 
B) $500 and 8,000. 
C) $600 and 6,000. 
D) $700 and 6,500. 
E) $800 and 7,000. 
A) $400 and 8,000. 
B) $500 and 8,000. 
C) $600 and 6,000. 
D) $700 and 6,500. 
E) $800 and 7,000.

Question 15

In the figure 8.17 graph A shows the market demand and supply in a competitive market and graph B shows the cost curves of a representative firm in that industry.

Accepted Answer

@#IMG-DLM& 
a)What is the market equilibrium price

Question 16

Which of the following is the correct sequence of events following an increase in demand for a product in a perfectly competitive market?

Accepted Answer

A) A decrease in the price and in the total profits of the representative firm which causes new firms to enter the industry. 
B) An increase in the price and in the total profits of the representative firm which causes firms to leave the industry. 
C) An increase in the price and in the total profits of the representative firm which causes new firms to enter the industry. 
D) An increase in the price but a decrease in the total profits of the representative firm which causes firms to leave the industry. 
A) A decrease in the price and in the total profits of the representative firm which causes new firms to enter the industry. 
B) An increase in the price and in the total profits of the representative firm which causes firms to leave the industry. 
C) An increase in the price and in the total profits of the representative firm which causes new firms to enter the industry. 
D) An increase in the price but a decrease in the total profits of the representative firm which causes firms to leave the industry.

Question 17

The following graph shows the costs for a perfectly competitive producer:
  
-Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?

Accepted Answer

A) 0. 
B) 20. 
C) 90. 
D) 100. 
E) Cannot be determined. 
A) 0. 
B) 20. 
C) 90. 
D) 100. 
E) Cannot be determined.

Question 18

At the current level of production,the firm's MC > MR > ATC > AVC.Is the firm earning an economic profit? Is the firm maximizing profit?

Accepted Answer

The firm is earning an economi

Question 19

The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
-Refer to the information above to answer this question.If the firm's average variable costs exceed the price,what should the firm do?

Accepted Answer

A) 1. 
B) 2. 
C) 3. 
D) 4. 
A) 1. 
B) 2. 
C) 3. 
D) 4.

Question 20

The supply curve of the firm in perfect competition is that portion of the marginal cost curve above the average variable cost curve.

Accepted Answer

A) True 
 B)False

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.What is the value of the break-even price?

What is the term for the amount of revenue that will always equal the price of the product in a perfectly-competitive market?

Suppose that at a particular output level a firm's MR = MC = $15 and its AVC = $12.Should a perfectly competitive firm shut down or continue to operate?

The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows: -Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?

What is the shape of the competitive firm's supply curve?

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500. -Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?

What is the name of the type of market that is dominated by a few firms?

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.If the price of the product is $40,how much will the manufacturer produce and what will be its total profit or loss?

Table 8.2 shows the total variable cost for a perfectly competitive firm. Table 8.2 a)If the price is $5,what is the profit maximizing level of output? b)If the price is $6,what is the profit maximizing level of output? c)If the price is $7,what is the profit maximizing level of output?

Assume that the following data is for a profit-maximizing manufacturer: -Refer to the above information to answer this question.What is the value of the break-even price?

Marginal revenue is the extra income a firm receives above break-even.

Which of the following refers to the perfectly competitive firm?

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.What is the value of the shut-down price?

In the figure 8.17 graph A shows the market demand and supply in a competitive market and graph B shows the cost curves of a representative firm in that industry.

Which of the following is the correct sequence of events following an increase in demand for a product in a perfectly competitive market?

The following graph shows the costs for a perfectly competitive producer: -Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?

At the current level of production,the firm's MC > MR > ATC > AVC.Is the firm earning an economic profit? Is the firm maximizing profit?

The supply curve of the firm in perfect competition is that portion of the marginal cost curve above the average variable cost curve.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 8: Perfect Competition

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.What is the value of the break-even price?

What is the term for the amount of revenue that will always equal the price of the product in a perfectly-competitive market?

Suppose that at a particular output level a firm's MR = MC = $15 and its AVC = $12.Should a perfectly competitive firm shut down or continue to operate?

The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows: -Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?

What is the shape of the competitive firm's supply curve?

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500. -Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?

What is the name of the type of market that is dominated by a few firms?

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.If the price of the product is $40,how much will the manufacturer produce and what will be its total profit or loss?

Table 8.2 shows the total variable cost for a perfectly competitive firm. Table 8.2 a)If the price is $5,what is the profit maximizing level of output? b)If the price is $6,what is the profit maximizing level of output? c)If the price is $7,what is the profit maximizing level of output?

Assume that the following data is for a profit-maximizing manufacturer: -Refer to the above information to answer this question.What is the value of the break-even price?

Marginal revenue is the extra income a firm receives above break-even.

Which of the following refers to the perfectly competitive firm?

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.What is the value of the shut-down price?

In the figure 8.17 graph A shows the market demand and supply in a competitive market and graph B shows the cost curves of a representative firm in that industry.

Which of the following is the correct sequence of events following an increase in demand for a product in a perfectly competitive market?

The following graph shows the costs for a perfectly competitive producer: -Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?

At the current level of production,the firm's MC > MR > ATC > AVC.Is the firm earning an economic profit? Is the firm maximizing profit?

The supply curve of the firm in perfect competition is that portion of the marginal cost curve above the average variable cost curve.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters