Question 1

The figure above shows some of a firm's cost curves and its marginal revenue curve.
-The firm in the figure above has a total revenue equal to ________.

Accepted Answer

A)  $5.10 × 10 
B)  $8.00 × 10 
C)  ($5.10 - $8.00) × 10 
D)  ($8.00 - $5.10) × 10 
E)  None of the above answers is correct because more information is needed. 
A)  $5.10 × 10 
B)  $8.00 × 10 
C)  ($5.10 - $8.00) × 10 
D)  ($8.00 - $5.10) × 10 
E)  None of the above answers is correct because more information is needed.

Question 2

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 3

A perfectly competitive firm will shut down when the price is just below the minimum point on the

Accepted Answer

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

Question 4

Pumpkin growing is a perfectly competitive industry.Suppose that pumpkin growers are all incurring an economic loss.What happens as time passes? What is the long-run equilibrium outcome?

Accepted Answer

Because the firms are incurring an econo

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.This firm will produce as long as the market price of a wafer is above

Accepted Answer

A)  $1,300. 
B)  $1,400. 
C)  $7,900. 
D)  $2,800. 
E)  $9,800. 
A)  $1,300. 
B)  $1,400. 
C)  $7,900. 
D)  $2,800. 
E)  $9,800.

Question 6

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 7

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

Accepted Answer

A)  3 
B)  5 
C)  6 
D)  8 
E)  7 
A)  3 
B)  5 
C)  6 
D)  8 
E)  7

Question 8

________ a large number of firms competing by making similar but slightly different products.

Accepted Answer

A)  Monopoly requires 
B)  Perfect competition requires 
C)  Monopolistic competition requires 
D)  Oligopoly requires 
E)  Both perfect competition and monopolistic competition require 
A)  Monopoly requires 
B)  Perfect competition requires 
C)  Monopolistic competition requires 
D)  Oligopoly requires 
E)  Both perfect competition and monopolistic competition require

Question 9

In the long run,a firm in a perfectly competitive market will

Accepted Answer

A)  make zero economic profit, so that its owners earn a normal profit. 
B)  make zero normal profit but its owners will make an economic profit. 
C)  remove all competitors and become a monopolistically competitive firm. 
D)  incur an economic normal loss but not earn a positive economic profit. 
E)  remove all competitors and become a monopoly. 
A)  make zero economic profit, so that its owners earn a normal profit. 
B)  make zero normal profit but its owners will make an economic profit. 
C)  remove all competitors and become a monopolistically competitive firm. 
D)  incur an economic normal loss but not earn a positive economic profit. 
E)  remove all competitors and become a monopoly.

Question 10

-Use the figure above to answer this question.Figure ________ shows a short-run equilibrium in good times because the firm makes a(n)________.

Accepted Answer

A)  A; economic profit 
B)  A; normal profit 
C)  B; normal profit 
D)  B; economic loss 
E)  C; normal profit 
A)  A; economic profit 
B)  A; normal profit 
C)  B; normal profit 
D)  B; economic loss 
E)  C; normal profit

Question 11

In which market structure does one firm sell a good or service with no close substitutes and there is a barrier blocking the entry of new firms?

Accepted Answer

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

Question 12

A perfectly competitive market arises when

Accepted Answer

A)  the market demand is small relative to the output of a firm. 
B)  there are many buyers but few sellers. 
C)  the market demand is very large relative to the output of one seller. 
D)  a firm has control over a unique resource. 
E)  each of the many firms produces a slightly different product. 
A)  the market demand is small relative to the output of a firm. 
B)  there are many buyers but few sellers. 
C)  the market demand is very large relative to the output of one seller. 
D)  a firm has control over a unique resource. 
E)  each of the many firms produces a slightly different product.

Question 13

Suppose Pat's Paints is a perfectly competitive firm.If Pat's Paints' marginal revenue equals $5 per can,and Pat decides to sell 100 cans of paint,Pat's total revenue equals

Accepted Answer

A)  $5. 
B)  $100. 
C)  $500. 
D)  $20. 
E)  Information on the price of a can of paint is needed to answer the question. 
A)  $5. 
B)  $100. 
C)  $500. 
D)  $20. 
E)  Information on the price of a can of paint is needed to answer the question.

Question 14

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 15

The corn market is perfectly competitive,with thousands of corn farmers.In the 2000s,the price of corn soared so that new farmers entered the corn market.Initially,entry ________ the economic profit of the initial corn farmers and in the long run the initial corn farmers ________.

Accepted Answer

A)  increased; made an even greater economic profit than initially 
B)  decreased; made zero economic profit 
C)  increased; made zero economic profit 
D)  decreased; incurred an economic loss 
E)  increased; made an economic profit 
A)  increased; made an even greater economic profit than initially 
B)  decreased; made zero economic profit 
C)  increased; made zero economic profit 
D)  decreased; incurred an economic loss 
E)  increased; made an economic profit

Question 16

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 17

-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 18

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

Accepted Answer

A)  rise; entry by new firms 
B)  fall; exit by existing firms 
C)  fall; entry by new firms 
D)  rise; exit by existing firms 
E)  fall; neither entry nor exit because the market is perfectly competitive 
A)  rise; entry by new firms 
B)  fall; exit by existing firms 
C)  fall; entry by new firms 
D)  rise; exit by existing firms 
E)  fall; neither entry nor exit because the market is perfectly competitive

Question 19

Which of the following is the best example of a perfectly competitive market?

Accepted Answer

A)  farming 
B)  diamonds 
C)  athletic shoes 
D)  soft drinks 
E)  electricity distribution 
A)  farming 
B)  diamonds 
C)  athletic shoes 
D)  soft drinks 
E)  electricity distribution

Question 20

During the middle of the 2000s,the price of gasoline soared and there was a movement to switch to fuels made from a mixture of gasoline and ethanol.Ethanol can be made from corn.The price of corn skyrocketed and then,after a couple of years,the price decreased.What might have led to these price changes in the corn market?

Accepted Answer

There are thousands upon thousands of co

The figure above shows some of a firm's cost curves and its marginal revenue curve. -The firm in the figure above has a total revenue equal to ________.

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

A perfectly competitive firm will shut down when the price is just below the minimum point on the

Pumpkin growing is a perfectly competitive industry.Suppose that pumpkin growers are all incurring an economic loss.What happens as time passes? What is the long-run equilibrium outcome?

-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.This firm will produce as long as the market price of a wafer is above

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?

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

________ a large number of firms competing by making similar but slightly different products.

In the long run,a firm in a perfectly competitive market will

-Use the figure above to answer this question.Figure shows a short-run equilibrium in good times because the firm makes a(n).

In which market structure does one firm sell a good or service with no close substitutes and there is a barrier blocking the entry of new firms?

A perfectly competitive market arises when

Suppose Pat's Paints is a perfectly competitive firm.If Pat's Paints' marginal revenue equals $5 per can,and Pat decides to sell 100 cans of paint,Pat's total revenue equals

One requirement for an industry to be perfectly competitive is that

The corn market is perfectly competitive,with thousands of corn farmers.In the 2000s,the price of corn soared so that new farmers entered the corn market.Initially,entry the economic profit of the initial corn farmers and in the long run the initial corn farmers .

In perfect competition,marginal revenue

-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 .

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .

Which of the following is the best example of a perfectly competitive market?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 15: Perfect Competition

The figure above shows some of a firm's cost curves and its marginal revenue curve. -The firm in the figure above has a total revenue equal to ________.

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

A perfectly competitive firm will shut down when the price is just below the minimum point on the

Pumpkin growing is a perfectly competitive industry.Suppose that pumpkin growers are all incurring an economic loss.What happens as time passes? What is the long-run equilibrium outcome?

-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.This firm will produce as long as the market price of a wafer is above

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?

-The above table has the total revenue and total cost schedule for Omar,a perfectly competitive grower of rutabagas.Omar's total profit is maximized when he produces ________ bushels of rutabagas.

________ a large number of firms competing by making similar but slightly different products.

In the long run,a firm in a perfectly competitive market will

-Use the figure above to answer this question.Figure ________ shows a short-run equilibrium in good times because the firm makes a(n)________.

In which market structure does one firm sell a good or service with no close substitutes and there is a barrier blocking the entry of new firms?

A perfectly competitive market arises when

Suppose Pat's Paints is a perfectly competitive firm.If Pat's Paints' marginal revenue equals $5 per can,and Pat decides to sell 100 cans of paint,Pat's total revenue equals

One requirement for an industry to be perfectly competitive is that

The corn market is perfectly competitive,with thousands of corn farmers.In the 2000s,the price of corn soared so that new farmers entered the corn market.Initially,entry ________ the economic profit of the initial corn farmers and in the long run the initial corn farmers ________.

In perfect competition,marginal revenue

-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 ________.

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

Which of the following is the best example of a perfectly competitive market?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-Use the figure above to answer this question.Figure shows a short-run equilibrium in good times because the firm makes a(n).

The corn market is perfectly competitive,with thousands of corn farmers.In the 2000s,the price of corn soared so that new farmers entered the corn market.Initially,entry the economic profit of the initial corn farmers and in the long run the initial corn farmers .

-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 .

A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will and eventually there will be .