Question 1

The price charged by a perfectly competitive firm is

Accepted Answer

A) the same as the market price. 
B) different than the price charged by competing firms. 
C) lower the more the firm produces. 
D) higher the more the firm produces. 
E) indeterminate. 
A) the same as the market price. 
B) different than the price charged by competing firms. 
C) lower the more the firm produces. 
D) higher the more the firm produces. 
E) indeterminate. A

Question 2

A market is ________ when a small number of firms compete.

Accepted Answer

A) a monopoly 
B) perfectly competitive 
C) monopolistically competitive 
D) an oligopoly 
E) either monopolistically competitive or an oligopoly 
A) a monopoly 
B) perfectly competitive 
C) monopolistically competitive 
D) an oligopoly 
E) either monopolistically competitive or an oligopoly D

Question 3

The firm in the figure above has a total cost equal to ________.

Accepted Answer

A) $5.10 × 10 
B) $8.00 × 10 
C) ($5.10 - $8.00)× 10 
D) ($8.00 - $5.10)× 10 
E) None of the above answers is correct because more information is needed. 
A) $5.10 × 10 
B) $8.00 × 10 
C) ($5.10 - $8.00)× 10 
D) ($8.00 - $5.10)× 10 
E) None of the above answers is correct because more information is needed. A

Question 4

Keith is a perfectly competitive carnation grower.The market price is $2 per dozen carnations.Keith's average total cost to grow carnations is $2.50 per dozen.In the long run,Keith will

Accepted Answer

A) raise his price to more than $2.50 per dozen carnations. 
B) raise his price to $2.50 per dozen carnations. 
C) exit the industry if the price and his costs do not change. 
D) incur an economic loss. 
E) continue to make an economic profit. 
A) raise his price to more than $2.50 per dozen carnations. 
B) raise his price to $2.50 per dozen carnations. 
C) exit the industry if the price and his costs do not change. 
D) incur an economic loss. 
E) continue to make an economic profit.

Question 5

A monopoly occurs when

Accepted Answer

A) each of many firms produces a product that is slightly different from that of the other firms. 
B) one firm sells a good that has no close substitutes and a barrier blocks entry for other firms. 
C) there are many firms producing the same product. 
D) a few firms control the market. 
E) one firm is larger than the many other firms that make an identical product. 
A) each of many firms produces a product that is slightly different from that of the other firms. 
B) one firm sells a good that has no close substitutes and a barrier blocks entry for other firms. 
C) there are many firms producing the same product. 
D) a few firms control the market. 
E) one firm is larger than the many other firms that make an identical product.

Question 6

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

Accepted Answer

A) rise;entry by new firms 
B) fall;exit by existing firms 
C) fall;entry by new firms 
D) rise;exit by existing firms 
E) fall;neither entry nor exit because the market is perfectly competitive 
A) rise;entry by new firms 
B) fall;exit by existing firms 
C) fall;entry by new firms 
D) rise;exit by existing firms 
E) fall;neither entry nor exit because the market is perfectly competitive

Question 7

When firms in a perfectly competitive market are earning an economic profit,in the long run

Accepted Answer

A) no new firms will enter the market. 
B) new firms will enter the market. 
C) firms will exit the market. 
D) the long-run average cost curve shifts downward. 
E) the initial firms continue to earn an economic profit. 
A) no new firms will enter the market. 
B) new firms will enter the market. 
C) firms will exit the market. 
D) the long-run average cost curve shifts downward. 
E) the initial firms continue to earn an economic profit.

Question 8

What four conditions define a perfectly competitive market?

Accepted Answer

The four conditions are that:
a.many fir

Question 9

The figure above shows a firm's total revenue and total cost curves.
-Based on the figure above,when the firm maximizes its profit,it produces ________ cans per day.

Accepted Answer

A) 0 
B) more than 0 and less than 5 
C) 5 or more but less than 10 
D) 10 
E) more than 10 
A) 0 
B) more than 0 and less than 5 
C) 5 or more but less than 10 
D) 10 
E) more than 10

Question 10

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

Accepted Answer

A) immediately shut down. 
B) continue to produce if the price exceeds the average fixed cost. 
C) continue to produce if the price exceeds the average variable cost. 
D) shut down if the price exceeds the average fixed cost. 
E) shut down if the price is less than the average fixed cost. 
A) immediately shut down. 
B) continue to produce if the price exceeds the average fixed cost. 
C) continue to produce if the price exceeds the average variable cost. 
D) shut down if the price exceeds the average fixed cost. 
E) shut down if the price is less than the average fixed cost.

Question 11

A market is classified as monopolistically competitive when

Accepted Answer

A) there is a barrier that blocks entry by other firms. 
B) a small number of firms compete. 
C) many firms produce the same product. 
D) many firms produce a slightly differentiated product. 
E) there is one firm that sells a good or service with no close substitutes. 
A) there is a barrier that blocks entry by other firms. 
B) a small number of firms compete. 
C) many firms produce the same product. 
D) many firms produce a slightly differentiated product. 
E) there is one firm that sells a good or service with no close substitutes.

Question 12

The firm in the figure above is ________ that is equal to ________.

Accepted Answer

A) making an economic profit;$8.00 × 10 
B) making an economic profit;$5.10 × 10 
C) incurring an economic loss;$5.10 × 10 
D) incurring an economic loss; ($8.00 - $5.10)× 10 
E) making an economic profit; ($8.00 - $5.10)× 10 
A) making an economic profit;$8.00 × 10 
B) making an economic profit;$5.10 × 10 
C) incurring an economic loss;$5.10 × 10 
D) incurring an economic loss; ($8.00 - $5.10)× 10 
E) making an economic profit; ($8.00 - $5.10)× 10

Question 13

The market for watermelons in Alabama is perfectly competitive.A watermelon producer making zero economic profit could make an economic profit if the

Accepted Answer

A) average total cost of selling watermelons does not change. 
B) average total cost of selling watermelons rises. 
C) average total cost of selling watermelons falls. 
D) marginal cost of selling watermelons does not change. 
E) marginal cost of selling watermelons rises. 
A) average total cost of selling watermelons does not change. 
B) average total cost of selling watermelons rises. 
C) average total cost of selling watermelons falls. 
D) marginal cost of selling watermelons does not change. 
E) marginal cost of selling watermelons rises.

Question 14

Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product.The new long-run equilibrium will have

Accepted Answer

A) fewer firms in the market. 
B) more firms in the market. 
C) the same number of firms in the market. 
D) probably a different number of firms,but it is not possible to determine if there will be more or fewer firms. 
E) a permanent decrease in supply. 
A) fewer firms in the market. 
B) more firms in the market. 
C) the same number of firms in the market. 
D) probably a different number of firms,but it is not possible to determine if there will be more or fewer firms. 
E) a permanent decrease in supply.

Question 15

"Perfectly competitive firms have total control over the price they set for their product." Explain why the previous statement is correct or incorrect.

Accepted Answer

The statement is incorrect.Perfectly com

Question 16

A perfectly competitive market arises when

Accepted Answer

A) the market demand is small relative to the output of a firm. 
B) there are many buyers but few sellers. 
C) the market demand is very large relative to the output of one seller. 
D) a firm has control over a unique resource. 
E) each of the many firms produces a slightly different product. 
A) the market demand is small relative to the output of a firm. 
B) there are many buyers but few sellers. 
C) the market demand is very large relative to the output of one seller. 
D) a firm has control over a unique resource. 
E) each of the many firms produces a slightly different product.

Question 17

For a perfectly competitive palm tree nursery in South Carolina,the total revenue curve is

Accepted Answer

A) downward sloping. 
B) a horizontal line. 
C) upward sloping. 
D) U-shaped. 
E) undefined because the firm is perfectly competitive. 
A) downward sloping. 
B) a horizontal line. 
C) upward sloping. 
D) U-shaped. 
E) undefined because the firm is perfectly competitive.

Question 18

A perfectly competitive firm's short-run supply curve is

Accepted Answer

A) horizontal at the market price. 
B) its total cost curve above the AVC. 
C) its marginal cost curve below the marginal revenue curve. 
D) its marginal cost curve above the AVC curve. 
E) its marginal revenue curve below the ATC curve. 
A) horizontal at the market price. 
B) its total cost curve above the AVC. 
C) its marginal cost curve below the marginal revenue curve. 
D) its marginal cost curve above the AVC curve. 
E) its marginal revenue curve below the ATC curve.

Question 19

Can a perfectly competitive firm make an economic profit in the short run? Can it incur an economic loss?

Accepted Answer

In the short run,a perfectly competitive

Question 20

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Accepted Answer

A) will definitely shut down to minimize its losses. 
B) will stay open to produce and will make zero economic profit. 
C) will stay open to produce and will incur an economic loss. 
D) will stay open to produce and will make an economic profit. 
E) might shut down but more information is needed about the fixed cost. 
A) will definitely shut down to minimize its losses. 
B) will stay open to produce and will make zero economic profit. 
C) will stay open to produce and will incur an economic loss. 
D) will stay open to produce and will make an economic profit. 
E) might shut down but more information is needed about the fixed cost.

The price charged by a perfectly competitive firm is

A market is ________ when a small number of firms compete.

The firm in the figure above has a total cost equal to ________.

Keith is a perfectly competitive carnation grower.The market price is $2 per dozen carnations.Keith's average total cost to grow carnations is $2.50 per dozen.In the long run,Keith will

A monopoly occurs when

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .

When firms in a perfectly competitive market are earning an economic profit,in the long run

What four conditions define a perfectly competitive market?

The figure above shows a firm's total revenue and total cost curves. -Based on the figure above,when the firm maximizes its profit,it produces ________ cans per day.

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

A market is classified as monopolistically competitive when

The firm in the figure above is that is equal to .

The market for watermelons in Alabama is perfectly competitive.A watermelon producer making zero economic profit could make an economic profit if the

Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product.The new long-run equilibrium will have

"Perfectly competitive firms have total control over the price they set for their product." Explain why the previous statement is correct or incorrect.

A perfectly competitive market arises when

For a perfectly competitive palm tree nursery in South Carolina,the total revenue curve is

A perfectly competitive firm's short-run supply curve is

Can a perfectly competitive firm make an economic profit in the short run? Can it incur an economic loss?

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 11: Perfect Competition

The price charged by a perfectly competitive firm is

A market is ________ when a small number of firms compete.

The firm in the figure above has a total cost equal to ________.

Keith is a perfectly competitive carnation grower.The market price is $2 per dozen carnations.Keith's average total cost to grow carnations is $2.50 per dozen.In the long run,Keith will

A monopoly occurs when

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

When firms in a perfectly competitive market are earning an economic profit,in the long run

What four conditions define a perfectly competitive market?

The figure above shows a firm's total revenue and total cost curves. -Based on the figure above,when the firm maximizes its profit,it produces ________ cans per day.

If the market price is lower than a perfectly competitive firm's average total cost,the firm will

A market is classified as monopolistically competitive when

The firm in the figure above is ________ that is equal to ________.

The market for watermelons in Alabama is perfectly competitive.A watermelon producer making zero economic profit could make an economic profit if the

Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product.The new long-run equilibrium will have

"Perfectly competitive firms have total control over the price they set for their product." Explain why the previous statement is correct or incorrect.

A perfectly competitive market arises when

For a perfectly competitive palm tree nursery in South Carolina,the total revenue curve is

A perfectly competitive firm's short-run supply curve is

Can a perfectly competitive firm make an economic profit in the short run? Can it incur an economic loss?

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .

The firm in the figure above is that is equal to .