Question 1

What is a perfectly competitive firm's short-run supply curve?

Accepted Answer

A perfectly competitive firm's

Question 2

A requirement of perfect competition is that
I.many firms sell an identical product to many buyers.
Ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms.
Iii.sellers and buyers are well informed about prices.

Accepted Answer

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

Question 3

Technological change

Accepted Answer

A) usually requires an investment in a new plant. 
B) is implemented in the short run. 
C) almost always increases the costs of production. 
D) almost always increases the variable costs of production. 
E) cannot help a firm to earn an economic profit in either the short run or the long run. 
A) usually requires an investment in a new plant. 
B) is implemented in the short run. 
C) almost always increases the costs of production. 
D) almost always increases the variable costs of production. 
E) cannot help a firm to earn an economic profit in either the short run or the long run.

Question 4

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 5

For a perfectly competitive firm,profit maximization occurs when output is such that

Accepted Answer

A) total revenue (TR)is maximized. 
B) total cost (T
C) is minimized. 
C) marginal revenue (MR)= marginal cost (M
C) . 
D) average total cost (AT
C) is minimized. 
E) total revenue (TR)equals total cost (T
C) . 
A) total revenue (TR)is maximized. 
B) total cost (T
C) is minimized. 
C) marginal revenue (MR)= marginal cost (M
C) . 
D) average total cost (AT
C) is minimized. 
E) total revenue (TR)equals total cost (T
C) .

Question 6

In a perfectly competitive market,one farmer's barley is

Accepted Answer

A) completely different from another farmer's barley. 
B) a perfect substitute for another farmer's barley. 
C) a monopolized product in that farmer's local market. 
D) a monopolized product in the national market. 
E) slightly different from another farmer's barley. 
A) completely different from another farmer's barley. 
B) a perfect substitute for another farmer's barley. 
C) a monopolized product in that farmer's local market. 
D) a monopolized product in the national market. 
E) slightly different from another farmer's barley.

Question 7

-The above diagram shows the cost curves for a perfectly competitive wheat farmer.At what price(s)does the wheat farmer earn an economic profit? Earn a normal profit? Incur an economic loss? How many bushels of wheat does the farmer produce if the price is $3 per bushel? If the price is $0.50 per bushel?

Accepted Answer

At any price that exceeds the minimum of

Question 8

The price for the shutdown point is ________.

Accepted Answer

A) $5.14 
B) between $3.01 and $5.13 
C) $3.00 
D) between $0 and $2.99 
E) greater than $5.15 
A) $5.14 
B) between $3.01 and $5.13 
C) $3.00 
D) between $0 and $2.99 
E) greater than $5.15

Question 9

How does a decrease in the demand for wheat ultimately lead to normal profits for wheat growers in the long run?

Accepted Answer

If the demand for wheat decreases,the pr

Question 10

A firm maximizes its profit by producing the amount of output such that

Accepted Answer

A) marginal revenue equals marginal cost. 
B) marginal revenue exceeds marginal cost by some amount. 
C) marginal revenue is maximized. 
D) marginal cost is minimized. 
E) marginal revenue exceeds marginal cost by the maximum amount possible. 
A) marginal revenue equals marginal cost. 
B) marginal revenue exceeds marginal cost by some amount. 
C) marginal revenue is maximized. 
D) marginal cost is minimized. 
E) marginal revenue exceeds marginal cost by the maximum amount possible.

Question 11

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

Accepted Answer

The demand curve faced by a perfectly co

Question 12

In perfect competition,marginal revenue

Accepted Answer

A) increases as more is sold. 
B) decreases as more is sold. 
C) is equal to the market price. 
D) is zero. 
E) is always greater than marginal cost. 
A) increases as more is sold. 
B) decreases as more is sold. 
C) is equal to the market price. 
D) is zero. 
E) is always greater than marginal cost.

Question 13

A market is initially in a long-run equilibrium and there is a permanent increase in demand.After the new long-run equilibrium is reached,there

Accepted Answer

A) are more firms in the market. 
B) are fewer firms in the market. 
C) are the same number of firms in the market. 
D) probably is a different number of firms in the market,but more information is needed to determine if the number of firms rises,falls,or perhaps does not change. 
E) is no change in the market. 
A) are more firms in the market. 
B) are fewer firms in the market. 
C) are the same number of firms in the market. 
D) probably is a different number of firms in the market,but more information is needed to determine if the number of firms rises,falls,or perhaps does not change. 
E) is no change in the market.

Question 14

For the perfectly competitive broccoli producers in California,the market demand curve for broccoli is

Accepted Answer

A) a horizontal line. 
B) downward sloping. 
C) nonexistent. 
D) upward sloping. 
E) the same as the demand curve each firm faces. 
A) a horizontal line. 
B) downward sloping. 
C) nonexistent. 
D) upward sloping. 
E) the same as the demand curve each firm faces.

Question 15

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar produces 2 bushels of rutabagas,his total profit equals

Accepted Answer

A) $0. 
B) $20. 
C) $28. 
D) -$8. 
E) $48. 
A) $0. 
B) $20. 
C) $28. 
D) -$8. 
E) $48.

Question 16

As a perfectly competitive firm produces more and more of a good,its economic profit

Accepted Answer

A) constantly increases. 
B) constantly decreases. 
C) first decreases,then increases. 
D) first increases,then decreases. 
E) does not change. 
A) constantly increases. 
B) constantly decreases. 
C) first decreases,then increases. 
D) first increases,then decreases. 
E) does not change.

Question 17

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

Accepted Answer

A) definitely produce the unit. 
B) shut down. 
C) not produce the unit but remain open. 
D) not produce the unit.Whether the firm should shut down or remain open cannot be determined without more information. 
E) produce the unit only if the price exceeds the average fixed cost. 
A) definitely produce the unit. 
B) shut down. 
C) not produce the unit but remain open. 
D) not produce the unit.Whether the firm should shut down or remain open cannot be determined without more information. 
E) produce the unit only if the price exceeds the average fixed cost.

Question 18

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

Accepted Answer

A) decrease,firms that use the new technology will make an economic profit,and in the long run new firms will enter the market. 
B) decrease,firms that use the new technology will incur an economic loss,and in the long run some firms will exit the industry. 
C) increase,firms that use the new technology will make an economic profit,and in the long run new firms will enter the market. 
D) increase,firms that use the new technology will incur an economic loss,and in the long run some firms will exit the industry. 
E) decrease,firms that do not use the new technology will make an economic profit,and in the long run new firms will enter the market. 
A) decrease,firms that use the new technology will make an economic profit,and in the long run new firms will enter the market. 
B) decrease,firms that use the new technology will incur an economic loss,and in the long run some firms will exit the industry. 
C) increase,firms that use the new technology will make an economic profit,and in the long run new firms will enter the market. 
D) increase,firms that use the new technology will incur an economic loss,and in the long run some firms will exit the industry. 
E) decrease,firms that do not use the new technology will make an economic profit,and in the long run new firms will enter the market.

Question 19

For a perfectly competitive firm,marginal revenue is

Accepted Answer

A) less than the price. 
B) greater than the price. 
C) equal to the price. 
D) equal to the change in profit from selling one more unit. 
E) undefined because the firm's demand curve is horizontal. 
A) less than the price. 
B) greater than the price. 
C) equal to the price. 
D) equal to the change in profit from selling one more unit. 
E) undefined because the firm's demand curve is horizontal.

Question 20

Entry by competitive firms decreases the market price,while exit by competitive firms increases the market price.Explain why firms enter or exit an industry and why these price changes occur.

Accepted Answer

Competitive firms will enter an industry

What is a perfectly competitive firm's short-run supply curve?

A requirement of perfect competition is that I.many firms sell an identical product to many buyers. Ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms. Iii.sellers and buyers are well informed about prices.

Technological change

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

For a perfectly competitive firm,profit maximization occurs when output is such that

In a perfectly competitive market,one farmer's barley is

The price for the shutdown point is ________.

How does a decrease in the demand for wheat ultimately lead to normal profits for wheat growers in the long run?

A firm maximizes its profit by producing the amount of output such that

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

In perfect competition,marginal revenue

A market is initially in a long-run equilibrium and there is a permanent increase in demand.After the new long-run equilibrium is reached,there

For the perfectly competitive broccoli producers in California,the market demand curve for broccoli is

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar produces 2 bushels of rutabagas,his total profit equals

As a perfectly competitive firm produces more and more of a good,its economic profit

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

For a perfectly competitive firm,marginal revenue is

Entry by competitive firms decreases the market price,while exit by competitive firms increases the market price.Explain why firms enter or exit an industry and why these price changes occur.

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

What is a perfectly competitive firm's short-run supply curve?

A requirement of perfect competition is that I.many firms sell an identical product to many buyers. Ii.there are no restrictions on entry into (or exit from)the market,and established firms have no advantage over new firms. Iii.sellers and buyers are well informed about prices.

Technological change

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

For a perfectly competitive firm,profit maximization occurs when output is such that

In a perfectly competitive market,one farmer's barley is

The price for the shutdown point is ________.

How does a decrease in the demand for wheat ultimately lead to normal profits for wheat growers in the long run?

A firm maximizes its profit by producing the amount of output such that

What is the shape of the demand curve faced by the perfectly competitive firm,and why?

In perfect competition,marginal revenue

A market is initially in a long-run equilibrium and there is a permanent increase in demand.After the new long-run equilibrium is reached,there

For the perfectly competitive broccoli producers in California,the market demand curve for broccoli is

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.When Omar produces 2 bushels of rutabagas,his total profit equals

As a perfectly competitive firm produces more and more of a good,its economic profit

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss)the firm should

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

For a perfectly competitive firm,marginal revenue is

Entry by competitive firms decreases the market price,while exit by competitive firms increases the market price.Explain why firms enter or exit an industry and why these price changes occur.

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

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