Question 1

One requirement for an industry to be perfectly competitive is that in the industry there

Accepted Answer

A) are a few firms who control the market. 
B) are many firms for whom the efficient scale of production is small. 
C) is one firm that sells a product with no close substitutes. 
D) are many firms selling different products. 
E) is a barrier to entry that makes the entry of new firms difficult. 
A) are a few firms who control the market. 
B) are many firms for whom the efficient scale of production is small. 
C) is one firm that sells a product with no close substitutes. 
D) are many firms selling different products. 
E) is a barrier to entry that makes the entry of new firms difficult.

Question 2

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

Accepted Answer

A) an increase in market supply. 
B) a decrease in market supply. 
C) an increase in market demand. 
D) a decrease in market demand. 
E) a decrease in both the market supply and the market demand. 
A) an increase in market supply. 
B) a decrease in market supply. 
C) an increase in market demand. 
D) a decrease in market demand. 
E) a decrease in both the market supply and the market demand.

Question 3

What is the relationship between the price,P,and the average total cost,ATC,for a firm in perfect competition that makes an economic profit? That makes zero economic profit? That incurs an economic loss?

Accepted Answer

If the price is greater than the average

Question 4

The rutabaga market is perfectly competitive and the price of a ton of rutabagas rises.As a result,Rudy,a rutabaga farmer,will

Accepted Answer

A) decrease his output of rutabagas. 
B) not change his output of rutabagas because Rudy's firm is a price taker. 
C) increase his output of rutabagas. 
D) at first decrease and then increase his output of rutabagas. 
E) probably change his output of rutabagas,but more information is needed about the change in the marginal revenue of a ton of rutabagas. 
A) decrease his output of rutabagas. 
B) not change his output of rutabagas because Rudy's firm is a price taker. 
C) increase his output of rutabagas. 
D) at first decrease and then increase his output of rutabagas. 
E) probably change his output of rutabagas,but more information is needed about the change in the marginal revenue of a ton of rutabagas.

Question 5

The rutabaga market is perfectly competitive.Research is published claiming that eating rutabagas leads to gaining weight and so the demand for rutabagas permanently decreases.The permanent decrease in demand results in a

Accepted Answer

A) lower price,economic losses by rutabaga farmers,and entry into the market. 
B) lower price,economic losses by rutabaga farmers,and exit from the market. 
C) higher price,economic profits for rutabaga farmers,and entry into the market. 
D) higher price,economic losses by rutabaga farmers,and exit from the market. 
E) lower price,economic profits for rutabaga farmers,and entry into the market. 
A) lower price,economic losses by rutabaga farmers,and entry into the market. 
B) lower price,economic losses by rutabaga farmers,and exit from the market. 
C) higher price,economic profits for rutabaga farmers,and entry into the market. 
D) higher price,economic losses by rutabaga farmers,and exit from the market. 
E) lower price,economic profits for rutabaga farmers,and entry into the market.

Question 6

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar maximizes his profit,Omar's profit equals

Accepted Answer

A) $80. 
B) $11. 
C) $30. 
D) $16. 
E) $105. 
A) $80. 
B) $11. 
C) $30. 
D) $16. 
E) $105.

Question 7

To maximize its profit,the firm in the figure above produces ________ cans per day and ________.

Accepted Answer

A) 0;incurs an economic loss of less than $20 
B) between 3 to 5 cans;earns a normal profit 
C) 10;earns an economic profit of $2.90 
D) 10;earns an economic profit of $29 
E) more than 10;earns an economic profit 
A) 0;incurs an economic loss of less than $20 
B) between 3 to 5 cans;earns a normal profit 
C) 10;earns an economic profit of $2.90 
D) 10;earns an economic profit of $29 
E) more than 10;earns an economic profit

Question 8

Pineapple growing is a perfectly competitive industry.How does the market demand curve for pineapples compare to the demand curve for an individual pineapple grower?

Accepted Answer

The market demand curve for pineapples i

Question 9

If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market,then each firm is producing

Accepted Answer

A) 600,000 units. 
B) 60,000,000,000 units. 
C) 60,000 units. 
D) 60 units. 
E) 10,000 units. 
A) 600,000 units. 
B) 60,000,000,000 units. 
C) 60,000 units. 
D) 60 units. 
E) 10,000 units.

Question 10

In the long run,a perfectly competitive firm makes zero economic profit.What incentive does the firm have to stay in business if it is making zero economic profit?

Accepted Answer

Zero economic profits do not mean no pro

Question 11

If the market price faced by a perfectly competitive firm increases,in the short run how does the firm respond?

Accepted Answer

If the market price rises,a pe

Question 12

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

Accepted Answer

If a firm's economic loss is greater whe

Question 13

In the long run,perfectly competitive firms produce at the output level that has the minimum

Accepted Answer

A) marginal cost. 
B) average total cost. 
C) average variable cost. 
D) average fixed cost. 
E) total revenue. 
A) marginal cost. 
B) average total cost. 
C) average variable cost. 
D) average fixed cost. 
E) total revenue.

Question 14

-The above figure illustrates a perfectly competitive firm.If the market price is $40 a unit,to maximize its profit (or minimize its loss)the firm should

Accepted Answer

A) shut down. 
B) produce more than 10 and less than 30 units. 
C) produce 30 units. 
D) produce more than 30 units and less than 40 units.. 
E) produce 40 units. 
A) shut down. 
B) produce more than 10 and less than 30 units. 
C) produce 30 units. 
D) produce more than 30 units and less than 40 units.. 
E) produce 40 units.

Question 15

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

Accepted Answer

A) making an economic profit;$5.14 × 7 
B) making an economic profit;$3.00 × 7 
C) incurring an economic loss;$5.14 × 7 
D) incurring an economic loss; ($5.14 - $3.00)× 7 
E) making an economic profit; ($5.14 - $3.00)× 7 
A) making an economic profit;$5.14 × 7 
B) making an economic profit;$3.00 × 7 
C) incurring an economic loss;$5.14 × 7 
D) incurring an economic loss; ($5.14 - $3.00)× 7 
E) making an economic profit; ($5.14 - $3.00)× 7

Question 16

If the price received by a perfectly competitive firm is less than its average variable cost,what will the firm do in the short run? Why?

Accepted Answer

If the price is less than the average va

Question 17

One requirement for an industry to be perfectly competitive is that

Accepted Answer

A) sellers and buyers have imperfect information about prices. 
B) established firms have no advantage over new firms. 
C) established firms have a significant advantage over new firms. 
D) different firms produce widely different products. 
E) many firms produce slightly different products. 
A) sellers and buyers have imperfect information about prices. 
B) established firms have no advantage over new firms. 
C) established firms have a significant advantage over new firms. 
D) different firms produce widely different products. 
E) many firms produce slightly different products.

Question 18

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic ________ equals ________.

Accepted Answer

A) loss;$800 per week 
B) profit;$1,280 per week 
C) profit;$480 per week 
D) loss;$1,280 per week 
E) profit;$32 per week 
A) loss;$800 per week 
B) profit;$1,280 per week 
C) profit;$480 per week 
D) loss;$1,280 per week 
E) profit;$32 per week

Question 19

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm.
-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 a normal profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making a normal profit 
A) is;incurring an economic loss 
B) is;making a normal profit 
C) is;making an economic profit 
D) is not;incurring an economic loss 
E) is not;making a normal profit

Question 20

If perfectly competitive firms are making an economic profit,then

Accepted Answer

A) the market must be in long-run equilibrium but cannot be in a short-run equilibrium. 
B) some firms will exit the market. 
C) new firms will enter the market. 
D) the market might be in a long-run equilibrium but not a short-run equilibrium. 
E) the market cannot be in either a short-run or a long-run equilibrium. 
A) the market must be in long-run equilibrium but cannot be in a short-run equilibrium. 
B) some firms will exit the market. 
C) new firms will enter the market. 
D) the market might be in a long-run equilibrium but not a short-run equilibrium. 
E) the market cannot be in either a short-run or a long-run equilibrium.

One requirement for an industry to be perfectly competitive is that in the industry there

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

What is the relationship between the price,P,and the average total cost,ATC,for a firm in perfect competition that makes an economic profit? That makes zero economic profit? That incurs an economic loss?

The rutabaga market is perfectly competitive and the price of a ton of rutabagas rises.As a result,Rudy,a rutabaga farmer,will

The rutabaga market is perfectly competitive.Research is published claiming that eating rutabagas leads to gaining weight and so the demand for rutabagas permanently decreases.The permanent decrease in demand results in a

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar maximizes his profit,Omar's profit equals

To maximize its profit,the firm in the figure above produces cans per day and .

Pineapple growing is a perfectly competitive industry.How does the market demand curve for pineapples compare to the demand curve for an individual pineapple grower?

If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market,then each firm is producing

In the long run,a perfectly competitive firm makes zero economic profit.What incentive does the firm have to stay in business if it is making zero economic profit?

If the market price faced by a perfectly competitive firm increases,in the short run how does the firm respond?

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

In the long run,perfectly competitive firms produce at the output level that has the minimum

-The above figure illustrates a perfectly competitive firm.If the market price is $40 a unit,to maximize its profit (or minimize its loss)the firm should

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

If the price received by a perfectly competitive firm is less than its average variable cost,what will the firm do in the short run? Why?

One requirement for an industry to be perfectly competitive is that

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic equals .

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

If perfectly competitive firms are making an economic profit,then

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

One requirement for an industry to be perfectly competitive is that in the industry there

To eliminate losses in a perfectly competitive market,firms exit the industry.This exit results in

What is the relationship between the price,P,and the average total cost,ATC,for a firm in perfect competition that makes an economic profit? That makes zero economic profit? That incurs an economic loss?

The rutabaga market is perfectly competitive and the price of a ton of rutabagas rises.As a result,Rudy,a rutabaga farmer,will

The rutabaga market is perfectly competitive.Research is published claiming that eating rutabagas leads to gaining weight and so the demand for rutabagas permanently decreases.The permanent decrease in demand results in a

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar maximizes his profit,Omar's profit equals

To maximize its profit,the firm in the figure above produces ________ cans per day and ________.

Pineapple growing is a perfectly competitive industry.How does the market demand curve for pineapples compare to the demand curve for an individual pineapple grower?

If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market,then each firm is producing

In the long run,a perfectly competitive firm makes zero economic profit.What incentive does the firm have to stay in business if it is making zero economic profit?

If the market price faced by a perfectly competitive firm increases,in the short run how does the firm respond?

What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?

In the long run,perfectly competitive firms produce at the output level that has the minimum

-The above figure illustrates a perfectly competitive firm.If the market price is $40 a unit,to maximize its profit (or minimize its loss)the firm should

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

If the price received by a perfectly competitive firm is less than its average variable cost,what will the firm do in the short run? Why?

One requirement for an industry to be perfectly competitive is that

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic ________ equals ________.

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

If perfectly competitive firms are making an economic profit,then

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

To maximize its profit,the firm in the figure above produces cans per day and .

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

-Bill owns a lawn-care company in Windermere,Florida,Florida,whose cost curves are illustrated in the above figure.The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed.If Bill's average total cost curve is ATC,his total economic equals .

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