Question 1

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

Accepted Answer

A) $5.14 × 7 
B) $3.00 × 7 
C) ($5.14 - $3.00)× 7 
D) ($3.00 - $5.14)× 7 
E) None of the above answers is correct because more information is needed. 
A) $5.14 × 7 
B) $3.00 × 7 
C) ($5.14 - $3.00)× 7 
D) ($3.00 - $5.14)× 7 
E) None of the above answers is correct because more information is needed.

Question 2

In the long run,a perfectly competitive firm makes

Accepted Answer

A) a positive economic profit. 
B) zero economic profit. 
C) negative economic profit,that is,an economic loss. 
D) zero accounting profit. 
E) either a positive economic profit or a normal profit. 
A) a positive economic profit. 
B) zero economic profit. 
C) negative economic profit,that is,an economic loss. 
D) zero accounting profit. 
E) either a positive economic profit or a normal profit.

Question 3

If a perfectly competitive firm manufacturing chairs produces 100 more chairs,what happens to the market price of a chair?

Accepted Answer

The price will not change.Any one perfec

Question 4

If there are 1,000 identical rice farmers who are each willing to supply 200 bushels of rice at $2 per bushel,what price and quantity combination is a point on the market supply curve for rice?

Accepted Answer

A) $2 and 200 bushels 
B) $2 and 200,000 bushels 
C) $2,000 and 200,000 bushels 
D) $2,000 and 1,000 bushels 
E) $2 and 1,000 farmers 
A) $2 and 200 bushels 
B) $2 and 200,000 bushels 
C) $2,000 and 200,000 bushels 
D) $2,000 and 1,000 bushels 
E) $2 and 1,000 farmers

Question 5

The market supply in the short run for the perfectly competitive industry is

Accepted Answer

A) the same as each producer's supply. 
B) the sum of the supply schedules of all firms. 
C) divided up according to each firm's selling price. 
D) set at the maximum price a buyer will pay for one unit. 
E) equal to the average of each firm's supply schedule. 
A) the same as each producer's supply. 
B) the sum of the supply schedules of all firms. 
C) divided up according to each firm's selling price. 
D) set at the maximum price a buyer will pay for one unit. 
E) equal to the average of each firm's supply schedule.

Question 6

The figure above shows a firm's marginal revenue and marginal cost curves.
-Based on the figure above,the price of a can is $8;if the price increased to $12,then the firm would

Accepted Answer

A) produce zero cans. 
B) decrease the amount of cans produces it but not to zero. 
C) not change the amount of cans it produces. 
D) increase the amount of cans it produces. 
E) More information is needed to determine what action the firm will take. 
A) produce zero cans. 
B) decrease the amount of cans produces it but not to zero. 
C) not change the amount of cans it produces. 
D) increase the amount of cans it produces. 
E) More information is needed to determine what action the firm will take.

Question 7

Suppose the price of a can was $5.10.In this case,to maximize its profit,the firm illustrated in the figure above would

Accepted Answer

A) decrease its production and would make an economic profit. 
B) not change its production and would make zero economic profit. 
C) not change its production and would make an economic profit. 
D) decrease its production and would incur an economic loss. 
E) not change its production and would incur an economic loss. 
A) decrease its production and would make an economic profit. 
B) not change its production and would make zero economic profit. 
C) not change its production and would make an economic profit. 
D) decrease its production and would incur an economic loss. 
E) not change its production and would incur an economic loss.

Question 8

Technological change allows perfectly competitive firms to ________ and leads to ________.

Accepted Answer

A) lower their costs;lower prices for consumers 
B) raise their prices;higher prices for consumers 
C) lower their costs;higher prices so the firms can earn economic profits in the long run 
D) raise their costs;higher prices and maximum profits in the long run 
E) lower their costs;deadweight loss 
A) lower their costs;lower prices for consumers 
B) raise their prices;higher prices for consumers 
C) lower their costs;higher prices so the firms can earn economic profits in the long run 
D) raise their costs;higher prices and maximum profits in the long run 
E) lower their costs;deadweight loss

Question 9

The above figure shows some a firm's cost curves and its marginal revenue curve.
-Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________.

Accepted Answer

A) is;incurring an economic loss 
B) is;making zero economic profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making zero economic profit 
A) is;incurring an economic loss 
B) is;making zero economic profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making zero economic profit

Question 10

The figure above shows some of a firm's cost curves and its marginal revenue curve.
-Based on the figure above,if the firm produces 10 cans per day,the firm ________ maximizing its profit and is ________.

Accepted Answer

A) is;incurring an economic loss 
B) is;making zero economic profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making zero economic profit 
A) is;incurring an economic loss 
B) is;making zero economic profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making zero economic profit

Question 11

If perfectly competitive firms are making an economic profit,then

Accepted Answer

A) the market is in its long-run equilibrium. 
B) new firms enter the market and the equilibrium profit of the firms already in the market decreases. 
C) new firms enter the market and the equilibrium profit of the firms already in the market increases. 
D) firms exit the market and the economic profit of the surviving firms in the market decreases. 
E) firms exit the market and the economic profit of the surviving firms in the market increases. 
A) the market is in its long-run equilibrium. 
B) new firms enter the market and the equilibrium profit of the firms already in the market decreases. 
C) new firms enter the market and the equilibrium profit of the firms already in the market increases. 
D) firms exit the market and the economic profit of the surviving firms in the market decreases. 
E) firms exit the market and the economic profit of the surviving firms in the market increases.

Question 12

Perfect competition ________ a fair outcome ________.

Accepted Answer

A) achieves;because both the fair rules and fair results conditions are met 
B) achieves;because total surplus is maximized 
C) does not achieve;because entrepreneurs only earn a normal profit 
D) does not achieve;because firms must be price takers 
E) may achieve;if average total costs are minimized 
A) achieves;because both the fair rules and fair results conditions are met 
B) achieves;because total surplus is maximized 
C) does not achieve;because entrepreneurs only earn a normal profit 
D) does not achieve;because firms must be price takers 
E) may achieve;if average total costs are minimized

Question 13

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

Accepted Answer

A perfectly competitive producer has no

Question 14

-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces ________ units and makes an economic profit that is ________.

Accepted Answer

A) more than 45;more than $400 
B) 40;more than $400 
C) 40;less than $400 
D) 30;equal to zero 
E) 30;more than $250 
A) more than 45;more than $400 
B) 40;more than $400 
C) 40;less than $400 
D) 30;equal to zero 
E) 30;more than $250

Question 15

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?

Accepted Answer

A) $23 
B) $150 
C) $1,000 
D) $1,150 
E) $20 
A) $23 
B) $150 
C) $1,000 
D) $1,150 
E) $20

Question 16

The marginal revenue curve for a perfectly competitive firm is

Accepted Answer

A) horizontal. 
B) vertical. 
C) upward sloping. 
D) downward sloping. 
E) a straight line coming out of the origin with a 45 degree slope. 
A) horizontal. 
B) vertical. 
C) upward sloping. 
D) downward sloping. 
E) a straight line coming out of the origin with a 45 degree slope.

Question 17

-American restaurants receive their supply of baby back-ribs from American farms and from farms in Denmark.In the figures above,the left diagram shows the perfectly competitive market for baby back ribs in the United States.The right figure shows the situation at Premium Standard Farm in Kansas,one of the many U.S.farms supplying these ribs.
Now assume that the United States imposes a ban on European meat in response to the foot-and-mouth disease that has infected livestock in Europe.(Which the United States did a few years ago. )In particular,suppose that the U.S.ban decreases the supply by 40 tons a year.Using the figure on the left,show the impact of this ban on the baby back rib market.Using the figure on the right,show the impact on Premium Standard Farm in Kansas.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& The ban on European meat decreases the

Question 18

Describe how economic losses are eliminated in a perfectly competitive industry.

Accepted Answer

If firms are incurring economic losses,s

Question 19

If a perfectly competitive firm raised the price of its product,

Accepted Answer

A) its profits would increase. 
B) the quantity of output it sells decreases to zero. 
C) rival firms will follow suit and raise their prices also. 
D) the firm will be forced to advertise more. 
E) its total revenue would rise but its total cost would rise by more. 
A) its profits would increase. 
B) the quantity of output it sells decreases to zero. 
C) rival firms will follow suit and raise their prices also. 
D) the firm will be forced to advertise more. 
E) its total revenue would rise but its total cost would rise by more.

Question 20

Firms exit a competitive market when they incur an economic loss.In the long run,this exit means that the economic losses of the surviving firms

Accepted Answer

A) increase. 
B) decrease until they equal zero. 
C) decrease until economic profits are earned. 
D) do not change. 
E) might change but more information is needed about what happens to the price of the good as the firms exit. 
A) increase. 
B) decrease until they equal zero. 
C) decrease until economic profits are earned. 
D) do not change. 
E) might change but more information is needed about what happens to the price of the good as the firms exit.

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

In the long run,a perfectly competitive firm makes

If a perfectly competitive firm manufacturing chairs produces 100 more chairs,what happens to the market price of a chair?

If there are 1,000 identical rice farmers who are each willing to supply 200 bushels of rice at $2 per bushel,what price and quantity combination is a point on the market supply curve for rice?

The market supply in the short run for the perfectly competitive industry is

The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8;if the price increased to $12,then the firm would

Suppose the price of a can was $5.10.In this case,to maximize its profit,the firm illustrated in the figure above would

Technological change allows perfectly competitive firms to and leads to .

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm maximizing its profit and is .

The figure above shows some of a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 10 cans per day,the firm maximizing its profit and is .

If perfectly competitive firms are making an economic profit,then

Perfect competition a fair outcome .

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces units and makes an economic profit that is .

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?

The marginal revenue curve for a perfectly competitive firm is

Describe how economic losses are eliminated in a perfectly competitive industry.

If a perfectly competitive firm raised the price of its product,

Firms exit a competitive market when they incur an economic loss.In the long run,this exit means that the economic losses of the surviving firms

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

In the long run,a perfectly competitive firm makes

If a perfectly competitive firm manufacturing chairs produces 100 more chairs,what happens to the market price of a chair?

If there are 1,000 identical rice farmers who are each willing to supply 200 bushels of rice at $2 per bushel,what price and quantity combination is a point on the market supply curve for rice?

The market supply in the short run for the perfectly competitive industry is

The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8;if the price increased to $12,then the firm would

Suppose the price of a can was $5.10.In this case,to maximize its profit,the firm illustrated in the figure above would

Technological change allows perfectly competitive firms to ________ and leads to ________.

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________.

The figure above shows some of a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 10 cans per day,the firm ________ maximizing its profit and is ________.

If perfectly competitive firms are making an economic profit,then

Perfect competition ________ a fair outcome ________.

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces ________ units and makes an economic profit that is ________.

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?

The marginal revenue curve for a perfectly competitive firm is

Describe how economic losses are eliminated in a perfectly competitive industry.

If a perfectly competitive firm raised the price of its product,

Firms exit a competitive market when they incur an economic loss.In the long run,this exit means that the economic losses of the surviving firms

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

Technological change allows perfectly competitive firms to and leads to .

The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm maximizing its profit and is .

The figure above shows some of a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 10 cans per day,the firm maximizing its profit and is .

Perfect competition a fair outcome .

-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces units and makes an economic profit that is .