Question 1

In the short run,a perfectly competitive firm

Accepted Answer

A)  must make an economic profit. 
B)  must incur an economic loss. 
C)  must make zero economic profit. 
D)  might make an economic profit, zero economic profit, or incur an economic loss. 
E)  None of the above answers is correct. 
A)  must make an economic profit. 
B)  must incur an economic loss. 
C)  must make zero economic profit. 
D)  might make an economic profit, zero economic profit, or incur an economic loss. 
E)  None of the above answers is correct.

Question 2

To increase its profit,a perfectly competitive firm will produce more output when

Accepted Answer

A)  price is greater than average fixed cost. 
B)  price is greater than marginal cost. 
C)  marginal cost is less than average total cost. 
D)  average variable cost is greater than average fixed cost. 
E)  price is greater than average variable cost. 
A)  price is greater than average fixed cost. 
B)  price is greater than marginal cost. 
C)  marginal cost is less than average total cost. 
D)  average variable cost is greater than average fixed cost. 
E)  price is greater than average variable cost.

Question 3

In a market undergoing technological change,firms that

Accepted Answer

A)  adopt the new technology temporarily incur an economic loss. 
B)  adopt the new technology temporarily make an economic profit. 
C)  do not adopt the new technology temporarily make an economic profit. 
D)  do not adopt the new technology increase their market share. 
E)  do not adopt the new technology continue to make a normal profit. 
A)  adopt the new technology temporarily incur an economic loss. 
B)  adopt the new technology temporarily make an economic profit. 
C)  do not adopt the new technology temporarily make an economic profit. 
D)  do not adopt the new technology increase their market share. 
E)  do not adopt the new technology continue to make a normal profit.

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

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 6

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Accepted Answer

A)  equal to marginal cost. 
B)  equal to average total cost. 
C)  greater than average total cost. 
D)  greater than marginal cost. 
E)  greater than average variable cost. 
A)  equal to marginal cost. 
B)  equal to average total cost. 
C)  greater than average total cost. 
D)  greater than marginal cost. 
E)  greater than average variable cost.

Question 7

Elsie is a perfectly competitive dairy farmer.The market price of milk was $2.40 but just fell to $2.20 a gallon.Elsie

Accepted Answer

A)  can sell as much milk as she wants at $2.20 a gallon. 
B)  will have to charge some customers $2.40 a gallon to stay in business. 
C)  will produce the same amount of milk at both prices. 
D)  can sell more at the lower price because the quantity demanded is higher at lower prices. 
E)  will be able to charge her initial customers $2.40 a gallon. 
A)  can sell as much milk as she wants at $2.20 a gallon. 
B)  will have to charge some customers $2.40 a gallon to stay in business. 
C)  will produce the same amount of milk at both prices. 
D)  can sell more at the lower price because the quantity demanded is higher at lower prices. 
E)  will be able to charge her initial customers $2.40 a gallon.

Question 8

Which of the following market types has only a few competing firms?

Accepted Answer

A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  perfect competition and monopolistic competition 
A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  perfect competition and monopolistic competition

Question 9

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 cost 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 10

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 11

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 12

The characteristics that describe a perfectly competitive industry include

Accepted Answer

A)  many firms selling an identical product. 
B)  one firm selling to many buyers. 
C)  many firms selling a slightly differentiated product. 
D)  a few firms selling to many buyers. 
E)  None of the above answers is correct. 
A)  many firms selling an identical product. 
B)  one firm selling to many buyers. 
C)  many firms selling a slightly differentiated product. 
D)  a few firms selling to many buyers. 
E)  None of the above answers is correct.

Question 13

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

Accepted Answer

A perfectly competitive producer has no

Question 14

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 15

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

Accepted Answer

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

Question 16

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 17

The figure above shows a firm's marginal revenue and marginal cost curves.
-Based on the figure above,the price of a can is $8; if the price increased to $12,then the firm would

Accepted Answer

A)  produce zero cans. 
B)  decrease the amount of cans produces it but not to zero. 
C)  not change the amount of cans it produces. 
D)  increase the amount of cans it produces. 
E)  More information is needed to determine what action the firm will take. 
A)  produce zero cans. 
B)  decrease the amount of cans produces it but not to zero. 
C)  not change the amount of cans it produces. 
D)  increase the amount of cans it produces. 
E)  More information is needed to determine what action the firm will take.

Question 18

Under what conditions would a perfectly competitive cotton farmer who is incurring an economic loss temporarily stay in business?

Accepted Answer

A)  if the total revenue exceeds the total fixed cost 
B)  if the total revenue exceeds the total variable cost 
C)  if the total revenue is positive 
D)  if the total revenue is increasing 
E)  if the marginal revenue exceeds the price. 
A)  if the total revenue exceeds the total fixed cost 
B)  if the total revenue exceeds the total variable cost 
C)  if the total revenue is positive 
D)  if the total revenue is increasing 
E)  if the marginal revenue exceeds the price.

Question 19

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 20

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.

In the short run,a perfectly competitive firm

To increase its profit,a perfectly competitive firm will produce more output when

In a market undergoing technological change,firms that

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

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?

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Elsie is a perfectly competitive dairy farmer.The market price of milk was $2.40 but just fell to $2.20 a gallon.Elsie

Which of the following market types has only a few competing firms?

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 cost equal to ________.

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

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?

The characteristics that describe a perfectly competitive industry include

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

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

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

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

The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8; if the price increased to $12,then the firm would

Under what conditions would a perfectly competitive cotton farmer who is incurring an economic loss temporarily stay in business?

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

For a perfectly competitive firm,marginal revenue is

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

In the short run,a perfectly competitive firm

To increase its profit,a perfectly competitive firm will produce more output when

In a market undergoing technological change,firms that

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

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?

A perfectly competitive firm definitely makes an economic profit in the short run if price is

Elsie is a perfectly competitive dairy farmer.The market price of milk was $2.40 but just fell to $2.20 a gallon.Elsie

Which of the following market types has only a few competing firms?

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 cost equal to ________.

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

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?

The characteristics that describe a perfectly competitive industry include

Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

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

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

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

The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8; if the price increased to $12,then the firm would

Under what conditions would a perfectly competitive cotton farmer who is incurring an economic loss temporarily stay in business?

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

For a perfectly competitive firm,marginal revenue is

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

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

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