Question 1

A perfectly competitive firm will maximize profit when the quantity produced is such that the

Accepted Answer

A) firm's total revenue is equal to total cost. 
B) firm's marginal revenue is equal to the price. 
C) firm's marginal revenue is equal to its marginal cost. 
D) price exceeds the firm's marginal cost by as much as possible. 
E) firm's marginal revenue exceeds its marginal cost by the maximum amount possible. 
A) firm's total revenue is equal to total cost. 
B) firm's marginal revenue is equal to the price. 
C) firm's marginal revenue is equal to its marginal cost. 
D) price exceeds the firm's marginal cost by as much as possible. 
E) firm's marginal revenue exceeds its marginal cost by the maximum amount possible.

Question 2

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

Accepted Answer

A) is making an economic profit. 
B) is making zero economic profit. 
C) will immediately shut down. 
D) will not shut down. 
E) might shut down but more information is needed about the AVC. 
A) is making an economic profit. 
B) is making zero economic profit. 
C) will immediately shut down. 
D) will not shut down. 
E) might shut down but more information is needed about the AVC.

Question 3

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

Accepted Answer

Acme's most profitable (which means,in t

Question 4

A perfectly competitive firm is producing 50 units of output,which it sells at the market price of $23 per unit.The firm's average total cost is $20.What is the firm's total revenue?

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 5

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,the firm is

Accepted Answer

A) making zero economic profit. 
B) making an economic profit of $12,000 an hour. 
C) incurring an economic loss of $2,800 an hour. 
D) incurring an economic loss of $2,000 an hour. 
E) making an economic profit of $2,400 an hour. 
A) making zero economic profit. 
B) making an economic profit of $12,000 an hour. 
C) incurring an economic loss of $2,800 an hour. 
D) incurring an economic loss of $2,000 an hour. 
E) making an economic profit of $2,400 an hour.

Question 6

Marginal revenue is

Accepted Answer

A) the change in total revenue from a one-unit increase in the quantity sold. 
B) another name for total revenue. 
C) the change in total cost from producing an additional unit of output. 
D) the economic profit from producing an additional unit of output. 
E) less than the market price for a perfectly competitive firm. 
A) the change in total revenue from a one-unit increase in the quantity sold. 
B) another name for total revenue. 
C) the change in total cost from producing an additional unit of output. 
D) the economic profit from producing an additional unit of output. 
E) less than the market price for a perfectly competitive firm.

Question 7

The demand curve faced by a perfectly competitive firm is

Accepted Answer

A) horizontal. 
B) vertical. 
C) downward sloping. 
D) upward sloping. 
E) U-shaped. 
A) horizontal. 
B) vertical. 
C) downward sloping. 
D) upward sloping. 
E) U-shaped.

Question 8

In a perfectly competitive industry,
I.entry by new firms shifts the market supply curve rightward.
Ii.exit by existing firms shifts the market supply curve leftward.
Iii.at all times existing firms make only zero economic profit.

Accepted Answer

A) ii and iii 
B) ii only 
C) i and iii 
D) i and ii 
E) i,ii,and iii 
A) ii and iii 
B) ii only 
C) i and iii 
D) i and ii 
E) i,ii,and iii

Question 9

How does the demand for any one seller's product in perfect competition compare to the market demand for that product?

Accepted Answer

A) They are identical. 
B) The demand for any one seller is proportionally smaller but otherwise identical to the market demand. 
C) The demand for any one seller's product is perfectly elastic while the market demand curve is downward sloping. 
D) There is no demand for any one seller's competitively sold product. 
E) The demand for any one seller's product is not perfectly elastic while the market demand is perfectly elastic. 
A) They are identical. 
B) The demand for any one seller is proportionally smaller but otherwise identical to the market demand. 
C) The demand for any one seller's product is perfectly elastic while the market demand curve is downward sloping. 
D) There is no demand for any one seller's competitively sold product. 
E) The demand for any one seller's product is not perfectly elastic while the market demand is perfectly elastic.

Question 10

If new firms enter a perfectly competitive industry,the market supply

Accepted Answer

A) does not change. 
B) becomes more price elastic. 
C) becomes more price inelastic. 
D) increases. 
E) decreases because each firm produces less than before the entry. 
A) does not change. 
B) becomes more price elastic. 
C) becomes more price inelastic. 
D) increases. 
E) decreases because each firm produces less than before the entry.

Question 11

For a perfectly competitive firm,profit is maximized at the output level where
I.total revenue exceeds total cost by the largest amount.
Ii.marginal revenue equals marginal cost.
Iii.price equals marginal cost.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) i,ii,and iii 
A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) i,ii,and iii

Question 12

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

Accepted Answer

A) will raise its price to increase its economic profit. 
B) will lower its price to increase its economic profit. 
C) is making an economic profit. 
D) is incurring an economic loss. 
E) is making zero economic profit. 
A) will raise its price to increase its economic profit. 
B) will lower its price to increase its economic profit. 
C) is making an economic profit. 
D) is incurring an economic loss. 
E) is making zero economic profit.

Question 13

In the long run,a perfectly competitive firm

Accepted Answer

A) can make either an economic profit or a normal profit. 
B) incurs an economic loss. 
C) makes zero economic profit. 
D) can make an economic profit,zero economic profit,or incur an economic loss. 
E) makes an economic profit. 
A) can make either an economic profit or a normal profit. 
B) incurs an economic loss. 
C) makes zero economic profit. 
D) can make an economic profit,zero economic profit,or incur an economic loss. 
E) makes an economic profit.

Question 14

Technological change brings a ________ to firms that adopt the new technology.

Accepted Answer

A) permanent economic profit 
B) temporary economic profit 
C) permanent economic loss 
D) temporary economic loss 
E) temporary normal profit 
A) permanent economic profit 
B) temporary economic profit 
C) permanent economic loss 
D) temporary economic loss 
E) temporary normal profit

Question 15

If a firm shuts down,it

Accepted Answer

A) makes zero economic profit. 
B) incurs an economic loss equal to its total variable cost. 
C) incurs an economic loss equal to its total fixed cost. 
D) makes a normal profit. 
E) might make an economic profit,zero economic profit,or incur an economic loss. 
A) makes zero economic profit. 
B) incurs an economic loss equal to its total variable cost. 
C) incurs an economic loss equal to its total fixed cost. 
D) makes a normal profit. 
E) might make an economic profit,zero economic profit,or incur an economic loss.

Question 16

Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market.The marginal cost is $3 per pound,the average variable cost is $2 per pound,and the beans sell for $4 per pound.Jerry

Accepted Answer

A) is maximizing profit. 
B) is incurring an economic loss and should shut down. 
C) could increase his profit by producing more beans. 
D) could increase his profit by producing fewer beans. 
E) could increase his profit by raising the price of his beans. 
A) is maximizing profit. 
B) is incurring an economic loss and should shut down. 
C) could increase his profit by producing more beans. 
D) could increase his profit by producing fewer beans. 
E) could increase his profit by raising the price of his beans.

Question 17

Suppose a perfectly competitive market is in a short-run equilibrium.If some firms exit the market,the profit of the remaining firms ________;if some firms enter the market,the profit of each existing firm ________.

Accepted Answer

A) decreases;is unchanged 
B) increases;decreases 
C) increases;is unchanged 
D) is unchanged;is unchanged 
E) decreases;increases 
A) decreases;is unchanged 
B) increases;decreases 
C) increases;is unchanged 
D) is unchanged;is unchanged 
E) decreases;increases

Question 18

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm.
-Based on the figure above,what is the price of a can?

Accepted Answer

A) $0 
B) $3.00 per can 
C) $5.14 per can 
D) None of the above prices is correct. 
E) More information is needed to determine the price of a can. 
A) $0 
B) $3.00 per can 
C) $5.14 per can 
D) None of the above prices is correct. 
E) More information is needed to determine the price of a can.

Question 19

When will new firms enter a perfectly competitive market? When does entry stop?

Accepted Answer

New firms will enter a perfectly competi

Question 20

-The above figure shows a perfectly competitive firm.If the market price is more than $20 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.

A perfectly competitive firm will maximize profit when the quantity produced is such that the

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

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

A perfectly competitive firm is producing 50 units of output,which it sells at the market price of $23 per unit.The firm's average total cost is $20.What is the firm's total revenue?

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,the firm is

Marginal revenue is

The demand curve faced by a perfectly competitive firm is

In a perfectly competitive industry, I.entry by new firms shifts the market supply curve rightward. Ii.exit by existing firms shifts the market supply curve leftward. Iii.at all times existing firms make only zero economic profit.

How does the demand for any one seller's product in perfect competition compare to the market demand for that product?

If new firms enter a perfectly competitive industry,the market supply

For a perfectly competitive firm,profit is maximized at the output level where I.total revenue exceeds total cost by the largest amount. Ii.marginal revenue equals marginal cost. Iii.price equals marginal cost.

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

In the long run,a perfectly competitive firm

Technological change brings a ________ to firms that adopt the new technology.

If a firm shuts down,it

Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market.The marginal cost is $3 per pound,the average variable cost is $2 per pound,and the beans sell for $4 per pound.Jerry

Suppose a perfectly competitive market is in a short-run equilibrium.If some firms exit the market,the profit of the remaining firms ;if some firms enter the market,the profit of each existing firm .

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm. -Based on the figure above,what is the price of a can?

When will new firms enter a perfectly competitive market? When does entry stop?

-The above figure shows a perfectly competitive firm.If the market price is more than $20 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

A perfectly competitive firm will maximize profit when the quantity produced is such that the

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

-Acme is a perfectly competitive firm.It has the cost schedules given in the above table and has a fixed cost of $12.00.The price of Acme's product is $4.00.What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

A perfectly competitive firm is producing 50 units of output,which it sells at the market price of $23 per unit.The firm's average total cost is $20.What is the firm's total revenue?

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,the firm is

Marginal revenue is

The demand curve faced by a perfectly competitive firm is

In a perfectly competitive industry, I.entry by new firms shifts the market supply curve rightward. Ii.exit by existing firms shifts the market supply curve leftward. Iii.at all times existing firms make only zero economic profit.

How does the demand for any one seller's product in perfect competition compare to the market demand for that product?

If new firms enter a perfectly competitive industry,the market supply

For a perfectly competitive firm,profit is maximized at the output level where I.total revenue exceeds total cost by the largest amount. Ii.marginal revenue equals marginal cost. Iii.price equals marginal cost.

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

In the long run,a perfectly competitive firm

Technological change brings a ________ to firms that adopt the new technology.

If a firm shuts down,it

Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market.The marginal cost is $3 per pound,the average variable cost is $2 per pound,and the beans sell for $4 per pound.Jerry

Suppose a perfectly competitive market is in a short-run equilibrium.If some firms exit the market,the profit of the remaining firms ________;if some firms enter the market,the profit of each existing firm ________.

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm. -Based on the figure above,what is the price of a can?

When will new firms enter a perfectly competitive market? When does entry stop?

-The above figure shows a perfectly competitive firm.If the market price is more than $20 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

Suppose a perfectly competitive market is in a short-run equilibrium.If some firms exit the market,the profit of the remaining firms ;if some firms enter the market,the profit of each existing firm .