Question 1

One requirement for an industry to be perfectly competitive is that

Accepted Answer

A) there are no restrictions on entry into or exit from the market. 
B) there are multiple restrictions on entry into or exit from the market. 
C) there are many firms selling different products. 
D) sellers and buyers have imperfect information about prices. 
E) the many firms sell slightly different products. 
A) there are no restrictions on entry into or exit from the market. 
B) there are multiple restrictions on entry into or exit from the market. 
C) there are many firms selling different products. 
D) sellers and buyers have imperfect information about prices. 
E) the many firms sell slightly different products.

Question 2

-The above figure shows three possible average total cost curves.If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC0,each produces 20 units,and the market price of the good is $16 per unit,then

Accepted Answer

A) the firms make an economic profit of $8 per unit. 
B) firms will enter the industry and the number of firms increases. 
C) the firms' ATC curves will eventually shift to become the same as ATC1. 
D) firms will exit the industry and the number of firms decreases. 
E) Both answers A and B are correct. 
A) the firms make an economic profit of $8 per unit. 
B) firms will enter the industry and the number of firms increases. 
C) the firms' ATC curves will eventually shift to become the same as ATC1. 
D) firms will exit the industry and the number of firms decreases. 
E) Both answers A and B are correct.

Question 3

The cranberry market is perfectly competitive.Reports that consuming cranberries can lead to improved health result in a permanent increase in the demand for cranberries and an immediate upward jump in the price of cranberries.As time passes,the price of cranberries ________ and the initial firms' economic ________.

Accepted Answer

A) falls;profit will be eliminated 
B) rises still higher;loss will be eliminated 
C) rises still higher;profit will not change 
D) falls;loss will be increased 
E) falls;profit will not change 
A) falls;profit will be eliminated 
B) rises still higher;loss will be eliminated 
C) rises still higher;profit will not change 
D) falls;loss will be increased 
E) falls;profit will not change

Question 4

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

Accepted Answer

A) perfect competition 
B) only monopoly 
C) oligopoly 
D) only monopolistic competition 
E) either monopoly or monopolistic competition 
A) perfect competition 
B) only monopoly 
C) oligopoly 
D) only monopolistic competition 
E) either monopoly or monopolistic competition

Question 5

Suppose the cost of a CD is $20.As online retailers enter the market with new technology,the price of CDs ________,and traditional music stores find that ________.

Accepted Answer

A) decreases;their AVC exceeds the new lower price and they exit the industry 
B) decreases;their ATC curve shifts lower and their profit increases 
C) increases;they compete with online retailers at the new higher price 
D) increases;their costs have risen due to the new technology 
E) decreases;they compete with online retailers with higher profits 
A) decreases;their AVC exceeds the new lower price and they exit the industry 
B) decreases;their ATC curve shifts lower and their profit increases 
C) increases;they compete with online retailers at the new higher price 
D) increases;their costs have risen due to the new technology 
E) decreases;they compete with online retailers with higher profits

Question 6

A firm that is a price taker faces

Accepted Answer

A) an elastic supply curve. 
B) an inelastic supply curve. 
C) a perfectly elastic demand curve. 
D) a perfectly inelastic demand curve. 
E) an elastic but not perfectly elastic demand curve. 
A) an elastic supply curve. 
B) an inelastic supply curve. 
C) a perfectly elastic demand curve. 
D) a perfectly inelastic demand curve. 
E) an elastic but not perfectly elastic demand curve.

Question 7

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

Accepted Answer

A) W 
B) X 
C) Y 
D) Z 
E) X and Figure Z 
A) W 
B) X 
C) Y 
D) Z 
E) X and Figure Z

Question 8

As a result of firms leaving the perfectly competitive frozen yogurt market in the early 2000s,the market

Accepted Answer

A) supply curve shifted leftward. 
B) supply curve did not change. 
C) demand curve shifted rightward. 
D) supply curve shifted rightward. 
E) demand curve shifted leftward. 
A) supply curve shifted leftward. 
B) supply curve did not change. 
C) demand curve shifted rightward. 
D) supply curve shifted rightward. 
E) demand curve shifted leftward.

Question 9

For a perfectly competitive syrup producer whose average total cost curve does not change,an economic profit could turn into an economic loss if the

Accepted Answer

A) market demand for syrup decreases. 
B) marginal cost curve shifts downward. 
C) market demand for syrup does not change. 
D) market demand for syrup increases. 
E) price of syrup rises. 
A) market demand for syrup decreases. 
B) marginal cost curve shifts downward. 
C) market demand for syrup does not change. 
D) market demand for syrup increases. 
E) price of syrup rises.

Question 10

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

Accepted Answer

A) greater than 
B) less than 
C) equal to 
D) zero compared to 
E) not comparable to 
A) greater than 
B) less than 
C) equal to 
D) zero compared to 
E) not comparable to

Question 11

The largest loss a profit-maximizing perfectly competitive firm can incur in the short run equals its

Accepted Answer

A) average variable cost multiplied by output. 
B) total fixed cost. 
C) marginal cost multiplied by the number of units produced. 
D) average total cost multiplied by the number of units produced. 
E) total variable cost. 
A) average variable cost multiplied by output. 
B) total fixed cost. 
C) marginal cost multiplied by the number of units produced. 
D) average total cost multiplied by the number of units produced. 
E) total variable cost.

Question 12

-The table below shows the total cost schedule for a perfectly competitive firm.The market price is $250 per unit.Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 13

When new firms enter a perfectly competitive market,the market supply curve shifts ________ and the price ________.

Accepted Answer

A) rightward;falls 
B) rightward;rises 
C) leftward;falls 
D) leftward;rises 
E) rightward;does not change 
A) rightward;falls 
B) rightward;rises 
C) leftward;falls 
D) leftward;rises 
E) rightward;does not change

Question 14

If the price is less than a perfectly competitive firm's minimum average variable cost,the firm

Accepted Answer

A) makes an economic profit. 
B) operates and incurs an economic loss equal to total fixed cost. 
C) operates and incurs an economic loss equal to average variable cost. 
D) shuts down and incurs an economic loss equal to total fixed cost. 
E) shuts down and incurs an economic loss equal to average variable cost. 
A) makes an economic profit. 
B) operates and incurs an economic loss equal to total fixed cost. 
C) operates and incurs an economic loss equal to average variable cost. 
D) shuts down and incurs an economic loss equal to total fixed cost. 
E) shuts down and incurs an economic loss equal to average variable cost.

Question 15

For a perfectly competitive sugar producer in Haiti,a short-run economic profit will occur if the price of each ton of sugar sold is

Accepted Answer

A) greater than the average total cost of producing sugar. 
B) equal to the average total cost of producing sugar. 
C) less than the average total cost of producing sugar. 
D) rising as more sugar is sold. 
E) greater than the marginal revenue of each ton of sugar. 
A) greater than the average total cost of producing sugar. 
B) equal to the average total cost of producing sugar. 
C) less than the average total cost of producing sugar. 
D) rising as more sugar is sold. 
E) greater than the marginal revenue of each ton of sugar.

Question 16

If firms in a perfectly competitive industry are earning an economic profit,then in the ________,firms will ________ the industry.

Accepted Answer

A) short run;enter 
B) long run;enter 
C) short run;exit 
D) long run;exit 
E) More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry. 
A) short run;enter 
B) long run;enter 
C) short run;exit 
D) long run;exit 
E) More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry.

Question 17

A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is

Accepted Answer

A) greater than the marginal revenue of each rental. 
B) less than the marginal revenue of each rental. 
C) equal to the marginal revenue of each rental. 
D) equal to the price of each rental. 
E) greater than the average variable cost of each rental. 
A) greater than the marginal revenue of each rental. 
B) less than the marginal revenue of each rental. 
C) equal to the marginal revenue of each rental. 
D) equal to the price of each rental. 
E) greater than the average variable cost of each rental.

Question 18

A firm in perfect competition is a price taker because

Accepted Answer

A) there are no good substitutes for its good. 
B) many other firms produce identical products. 
C) it is very large. 
D) its demand curves are downward sloping. 
E) its demand curve is vertical at the profit-maximizing quantity. 
A) there are no good substitutes for its good. 
B) many other firms produce identical products. 
C) it is very large. 
D) its demand curves are downward sloping. 
E) its demand curve is vertical at the profit-maximizing quantity.

Question 19

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

Accepted Answer

A) a monopoly. 
B) an oligopoly. 
C) perfectly competitive. 
D) monopolistically competitive. 
E) Both answers C and D can be correct. 
A) a monopoly. 
B) an oligopoly. 
C) perfectly competitive. 
D) monopolistically competitive. 
E) Both answers C and D can be correct.

Question 20

In which market structure is there a large number of firms producing slightly differentiated products?

Accepted Answer

A) monopoly 
B) oligopoly 
C) only perfect competition 
D) only monopolistic competition 
E) either perfect competition or monopolistic competition 
A) monopoly 
B) oligopoly 
C) only perfect competition 
D) only monopolistic competition 
E) either perfect competition or monopolistic competition

One requirement for an industry to be perfectly competitive is that

-The above figure shows three possible average total cost curves.If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC0,each produces 20 units,and the market price of the good is $16 per unit,then

The cranberry market is perfectly competitive.Reports that consuming cranberries can lead to improved health result in a permanent increase in the demand for cranberries and an immediate upward jump in the price of cranberries.As time passes,the price of cranberries and the initial firms' economic .

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

Suppose the cost of a CD is $20.As online retailers enter the market with new technology,the price of CDs ,and traditional music stores find that .

A firm that is a price taker faces

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

As a result of firms leaving the perfectly competitive frozen yogurt market in the early 2000s,the market

For a perfectly competitive syrup producer whose average total cost curve does not change,an economic profit could turn into an economic loss if the

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

The largest loss a profit-maximizing perfectly competitive firm can incur in the short run equals its

-The table below shows the total cost schedule for a perfectly competitive firm.The market price is $250 per unit.Complete the table.

When new firms enter a perfectly competitive market,the market supply curve shifts and the price .

If the price is less than a perfectly competitive firm's minimum average variable cost,the firm

For a perfectly competitive sugar producer in Haiti,a short-run economic profit will occur if the price of each ton of sugar sold is

If firms in a perfectly competitive industry are earning an economic profit,then in the ,firms will the industry.

A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is

A firm in perfect competition is a price taker because

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

In which market structure is there a large number of firms producing slightly differentiated products?

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

-The above figure shows three possible average total cost curves.If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC0,each produces 20 units,and the market price of the good is $16 per unit,then

When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?

Suppose the cost of a CD is $20.As online retailers enter the market with new technology,the price of CDs ________,and traditional music stores find that ________.

A firm that is a price taker faces

-In the above,a marginal revenue curve for a perfectly competitive firm is shown in Figure ________.

As a result of firms leaving the perfectly competitive frozen yogurt market in the early 2000s,the market

For a perfectly competitive syrup producer whose average total cost curve does not change,an economic profit could turn into an economic loss if the

During the winter,theme parks in Orlando close earlier than in the summer.The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

The largest loss a profit-maximizing perfectly competitive firm can incur in the short run equals its

-The table below shows the total cost schedule for a perfectly competitive firm.The market price is $250 per unit.Complete the table.

When new firms enter a perfectly competitive market,the market supply curve shifts ________ and the price ________.

If the price is less than a perfectly competitive firm's minimum average variable cost,the firm

For a perfectly competitive sugar producer in Haiti,a short-run economic profit will occur if the price of each ton of sugar sold is

If firms in a perfectly competitive industry are earning an economic profit,then in the ________,firms will ________ the industry.

A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is

A firm in perfect competition is a price taker because

The U.S.oil industry has only a few firms in it,so an economists is likely to describe the industry as

In which market structure is there a large number of firms producing slightly differentiated products?

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 the cost of a CD is $20.As online retailers enter the market with new technology,the price of CDs ,and traditional music stores find that .

When new firms enter a perfectly competitive market,the market supply curve shifts and the price .

If firms in a perfectly competitive industry are earning an economic profit,then in the ,firms will the industry.