Question 1

Based on the NEWSWIRE article,"Catfish Farmers Feel Forced Out of Business",what should happen to the equilibrium price and quantity of catfish over time?

Accepted Answer

A)  Equilibrium price and quantity should both go up. 
B)  Equilibrium price should go up,and equilibrium quantity should go down. 
C)  Equilibrium price should go down,and equilibrium quantity should go up. 
D)  Equilibrium price and quantity should both go down. 
A)  Equilibrium price and quantity should both go up. 
B)  Equilibrium price should go up,and equilibrium quantity should go down. 
C)  Equilibrium price should go down,and equilibrium quantity should go up. 
D)  Equilibrium price and quantity should both go down.

Question 2

If productivity increases,the marginal cost curve will shift upward.

Accepted Answer

A) True 
 B)False

Question 3

If the level of productivity increases,then:

Accepted Answer

A)  The marginal cost curve shifts upward. 
B)  Market price increases. 
C)  The marginal cost curve shifts downward. 
D)  The firm will supply less output. 
A)  The marginal cost curve shifts upward. 
B)  Market price increases. 
C)  The marginal cost curve shifts downward. 
D)  The firm will supply less output.

Question 4

Which of the following is an example of monopolistic competition?

Accepted Answer

A)  One large firm supplies the entire market 
B)  One firm supplies 60 percent of the product to the market and there are three other rival firms 
C)  Many firms supply similar products,each with some consumers who show significant brand loyalty 
D)  Two firms supply the entire market 
A)  One large firm supplies the entire market 
B)  One firm supplies 60 percent of the product to the market and there are three other rival firms 
C)  Many firms supply similar products,each with some consumers who show significant brand loyalty 
D)  Two firms supply the entire market

Question 5

An individual wheat farmer has no market power because:

Accepted Answer

A)  It can differentiate its wheat. 
B)  It can alter the market price. 
C)  Its output is a large portion of the entire market. 
D)  It must accept the equilibrium market price. 
A)  It can differentiate its wheat. 
B)  It can alter the market price. 
C)  Its output is a large portion of the entire market. 
D)  It must accept the equilibrium market price.

Question 6

In making a production decision,a business owner:

Accepted Answer

A)  Decides whether to enter or exit the market. 
B)  Makes a long-run decision about output and revenues. 
C)  Decides whether to buy or lease new plant and equipment. 
D)  Decides the short-run rate of output. 
A)  Decides whether to enter or exit the market. 
B)  Makes a long-run decision about output and revenues. 
C)  Decides whether to buy or lease new plant and equipment. 
D)  Decides the short-run rate of output.

Question 7

Equilibrium price refers to the:

Accepted Answer

A)  Price at which most producers are willing to sell their product. 
B)  Price at which the quantity demanded of a good equals the quantity supplied. 
C)  Price that equals marginal cost. 
D)  Balance between what producers want to charge and what the government will allow. 
A)  Price at which most producers are willing to sell their product. 
B)  Price at which the quantity demanded of a good equals the quantity supplied. 
C)  Price that equals marginal cost. 
D)  Balance between what producers want to charge and what the government will allow.

Question 8

The production decision is a choice about long-run supply.

Accepted Answer

A) True 
 B)False

Question 9

In a perfectly competitive industry,each producer contributes a very small percentage of total market output.

Accepted Answer

A) True 
 B)False

Question 10

In perfect competition,the market demand curve for a product is flat or horizontal.

Accepted Answer

A) True 
 B)False

Question 11

Market structure is determined by the number and relative size of the firms in the industry.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a determinant of market supply but will not influence the marginal cost curve of an individual firm?

Accepted Answer

A)  The price of factor inputs. 
B)  The number of firms in the market. 
C)  Improvements in technology. 
D)  The person's desires. 
A)  The price of factor inputs. 
B)  The number of firms in the market. 
C)  Improvements in technology. 
D)  The person's desires.

Question 13

When economic losses exist in a perfectly competitive market,the number of suppliers will increase and the market price will fall.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not considered a barrier to entry?

Accepted Answer

A)  Marginal cost pricing 
B)  Control of resources 
C)  Patents 
D)  Price controls 
A)  Marginal cost pricing 
B)  Control of resources 
C)  Patents 
D)  Price controls

Question 15

Suppose a perfectly competitive firm increases its output.In order to sell this additional output,the firm:

Accepted Answer

A)  Should price it at the market price. 
B)  Should raise its price to sell the additional output. 
C)  Must lower its price to sell the additional output. 
D)  Will not be able to sell the additional output at any price because of the many competitive firms. 
A)  Should price it at the market price. 
B)  Should raise its price to sell the additional output. 
C)  Must lower its price to sell the additional output. 
D)  Will not be able to sell the additional output at any price because of the many competitive firms.

Question 16

Which of the following is considered a barrier to entry?

Accepted Answer

A)  Price taking 
B)  Standardized products 
C)  Brand loyalty 
D)  Economic profit 
A)  Price taking 
B)  Standardized products 
C)  Brand loyalty 
D)  Economic profit

Question 17

Which of the following does not characterize a competitive market?

Accepted Answer

A)  Marginal cost equals price 
B)  Zero economic profit 
C)  Identical products 
D)  High barriers to entry 
A)  Marginal cost equals price 
B)  Zero economic profit 
C)  Identical products 
D)  High barriers to entry

Question 18

In monopolistic competition,firms do not have the ability to alter market price.

Accepted Answer

A) True 
 B)False

Question 19

A perfectly competitive firm:

Accepted Answer

A)  Can sell all of its output at the prevailing price. 
B)  Has some market power. 
C)  Can sell some output at a price above the market price. 
D)  Can sell more output only if it reduces its price. 
A)  Can sell all of its output at the prevailing price. 
B)  Has some market power. 
C)  Can sell some output at a price above the market price. 
D)  Can sell more output only if it reduces its price.

Question 20

Ceteris paribus,if the cost of paper increases for book publishers,in order to maximize profits,book publishers should:

Accepted Answer

A)  Increase output. 
B)  Produce the same level of output since price has not changed. 
C)  Decrease price. 
D)  Decrease output. 
A)  Increase output. 
B)  Produce the same level of output since price has not changed. 
C)  Decrease price. 
D)  Decrease output.

Based on the NEWSWIRE article,"Catfish Farmers Feel Forced Out of Business",what should happen to the equilibrium price and quantity of catfish over time?

If productivity increases,the marginal cost curve will shift upward.

If the level of productivity increases,then:

Which of the following is an example of monopolistic competition?

An individual wheat farmer has no market power because:

In making a production decision,a business owner:

Equilibrium price refers to the:

The production decision is a choice about long-run supply.

In a perfectly competitive industry,each producer contributes a very small percentage of total market output.

In perfect competition,the market demand curve for a product is flat or horizontal.

Market structure is determined by the number and relative size of the firms in the industry.

Which of the following is a determinant of market supply but will not influence the marginal cost curve of an individual firm?

When economic losses exist in a perfectly competitive market,the number of suppliers will increase and the market price will fall.

Which of the following is not considered a barrier to entry?

Suppose a perfectly competitive firm increases its output.In order to sell this additional output,the firm:

Which of the following is considered a barrier to entry?

Which of the following does not characterize a competitive market?

In monopolistic competition,firms do not have the ability to alter market price.

A perfectly competitive firm:

Ceteris paribus,if the cost of paper increases for book publishers,in order to maximize profits,book publishers should:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 6: Competition

Based on the NEWSWIRE article,"Catfish Farmers Feel Forced Out of Business",what should happen to the equilibrium price and quantity of catfish over time?

If productivity increases,the marginal cost curve will shift upward.

If the level of productivity increases,then:

Which of the following is an example of monopolistic competition?

An individual wheat farmer has no market power because:

In making a production decision,a business owner:

Equilibrium price refers to the:

The production decision is a choice about long-run supply.

In a perfectly competitive industry,each producer contributes a very small percentage of total market output.

In perfect competition,the market demand curve for a product is flat or horizontal.

Market structure is determined by the number and relative size of the firms in the industry.

Which of the following is a determinant of market supply but will not influence the marginal cost curve of an individual firm?

When economic losses exist in a perfectly competitive market,the number of suppliers will increase and the market price will fall.

Which of the following is not considered a barrier to entry?

Suppose a perfectly competitive firm increases its output.In order to sell this additional output,the firm:

Which of the following is considered a barrier to entry?

Which of the following does not characterize a competitive market?

In monopolistic competition,firms do not have the ability to alter market price.

A perfectly competitive firm:

Ceteris paribus,if the cost of paper increases for book publishers,in order to maximize profits,book publishers should:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters