Question 1

A monopoly is a single firm that produces the entire market supply of a particular good or service.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following characterizes a perfectly competitive market?

Accepted Answer

A)   A downward-sloping demand curve facing the firm.
B)   A horizontal demand curve for the market.
C)   A selling price at the market-established equilibrium price.
D)   A few firms that compete by changing price.

Question 3

In which of the following industries is the firm referred to as a price taker?

Accepted Answer

A)   Monopolistic competition
B)   Monopoly
C)   Perfect competition
D)   Oligopoly

Question 4

Which of the following is consistent with a competitive market?

Accepted Answer

A)   A small number of firms
B)   Exit of small firms when profits are high for large firms
C)   Zero economic profit in the long run
D)   Marginal revenue lower than price for each firm

Question 5

Total profit is the difference between total revenue and total cost.

Accepted Answer

A) True 
 B)False

Question 6

The production decision is the:

Accepted Answer

A)   Selection of the short-run rate of output.
B)   Selection of the long-run rate of output.
C)   Choice of whether to enter or exit the industry.
D)   Choice of factory or plant size.

Question 7

Which of the following is an example of perfect competition?

Accepted Answer

A)   One large firm supplies the entire product to the market
B)   Two firms supply the entire market and compete with each other for customers
C)   Many small firms all produce the same good
D)   Many firms supply the same product essentially,but each has significant brand loyalty

Question 8

In a competitive market with economic profits,equilibrium:

Accepted Answer

A)   Price will rise as new firms enter the market.
B)   Price will fall as new firms enter the market.
C)   Quantity will fall as new firms enter the market.
D)   Quantity will remain the same as new firms enter the market.

Question 9

If the market supply curve shifts to the left,explain in terms of the market supply determinants what would have to change to cause that shift.

Accepted Answer

In order for the market supply curve to ...

Question 10

Figure 6.2: 
-Refer to Figure 6.2 for a perfectly competitive firm.If price is $4,the firm is:

Accepted Answer

A)   In long run equilibrium.
B)   Earning an economic loss.
C)   Maximizing efficiency.
D)   Earning an economic profit.

Question 11

Distinguish the difference between the market demand curve and the demand curve that a particular firm in the industry faces.Why are the two curves different?

Accepted Answer

The market demand curve is a downward sl...

Question 12

Market supply in a competitive market is determined by:

Accepted Answer

A)   Income.
B)   The number of buyers.
C)   The cost of factor inputs.
D)   Consumer preferences.

Question 13

Marginal cost is the change in total costs because of a one-unit increase in output.

Accepted Answer

A) True 
 B)False

Question 14

In perfect competition,price is determined by the market and individual firms have no control over price.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that consumers learn that eating apples can significantly reduce a person's chance of getting cancer.Comment on what the apple producers would notice in terms of their marginal cost verses marginal revenue.In the short-run,what would you expect them to do and what would happen to the market price and quantity produced.In the long-run what do you expect would happen to the market price and quantity?

Accepted Answer

Since apple producers operate in a compe...

Question 16

A perfectly competitive firm is a price taker because:

Accepted Answer

A)   It has no control over the market price of its product.
B)   It has market power.
C)   Market demand is downward sloping.
D)   Its products are differentiateD.

Question 17

The number and relative size of firms in an industry is the definition of:

Accepted Answer

A)   Competitive firm.
B)   Competitive market.
C)   Market structure.
D)   Monopoly.

Question 18

Figure 6.1: 
-Refer to Figure 6.1 for a perfectly competitive firm.If the market price is $46:

Accepted Answer

A)   The firm should produce 19 units.
B)   There will be economic losses.
C)   There will be economic profits.
D)   Economic profits equal zero.

Question 19

Choosing the rate of output with existing plant and equipment is known as the production decision.

Accepted Answer

A) True 
 B)False

Question 20

In the long run,a perfectly competitive market with economic losses will experience:

Accepted Answer

A)   An increase in equilibrium price as firms exit.
B)   An increase in equilibrium quantity as firms exit.
C)   The entry of firms until economic profits are zero.
D)   No change in equilibrium price or quantity.

Exam 6: Competition

In the long run,a perfectly competitive market with economic losses will experience:

Correct Answer
verified

Marginal cost is the change in total costs because of a one-unit increase in output.

Correct Answer
verified

Which of the following is an example of perfect competition?

Correct Answer
verified

In a competitive market with economic profits,equilibrium:

Correct Answer
verified

Correct Answer
verified
Since apple producers operate in a compe...
View Answer

Figure 6.1: -Refer to Figure 6.1 for a perfectly competitive firm.If the market price is $46:

Correct Answer
verified

In which of the following industries is the firm referred to as a price taker?

Correct Answer
verified

Figure 6.2: -Refer to Figure 6.2 for a perfectly competitive firm.If price is $4,the firm is:

Correct Answer
verified

Which of the following is consistent with a competitive market?

Correct Answer
verified

Choosing the rate of output with existing plant and equipment is known as the production decision.

Correct Answer
verified

Total profit is the difference between total revenue and total cost.

Correct Answer
verified

Distinguish the difference between the market demand curve and the demand curve that a particular firm in the industry faces.Why are the two curves different?

Correct Answer
verified
The market demand curve is a downward sl...
View Answer

The production decision is the:

Correct Answer
verified

A perfectly competitive firm is a price taker because:

Correct Answer
verified

Market supply in a competitive market is determined by:

Correct Answer
verified

The number and relative size of firms in an industry is the definition of:

Correct Answer
verified

In perfect competition,price is determined by the market and individual firms have no control over price.

Correct Answer
verified

If the market supply curve shifts to the left,explain in terms of the market supply determinants what would have to change to cause that shift.

Correct Answer
verified
In order for the market supply curve to ...
View Answer

A monopoly is a single firm that produces the entire market supply of a particular good or service.

Correct Answer
verified

Which of the following characterizes a perfectly competitive market?

Correct Answer
verified

Exam 6: Competition

In the long run,a perfectly competitive market with economic losses will experience:

Correct AnswerverifiedShow Answer

Marginal cost is the change in total costs because of a one-unit increase in output.

Correct AnswerverifiedShow Answer

Which of the following is an example of perfect competition?

Correct AnswerverifiedShow Answer

In a competitive market with economic profits,equilibrium:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedSince apple producers operate in a compe...View AnswerShow Answer

Figure 6.1: -Refer to Figure 6.1 for a perfectly competitive firm.If the market price is $46:

Correct AnswerverifiedShow Answer

In which of the following industries is the firm referred to as a price taker?

Correct AnswerverifiedShow Answer

Figure 6.2: -Refer to Figure 6.2 for a perfectly competitive firm.If price is $4,the firm is:

Correct AnswerverifiedShow Answer

Which of the following is consistent with a competitive market?

Correct AnswerverifiedShow Answer

Choosing the rate of output with existing plant and equipment is known as the production decision.

Correct AnswerverifiedShow Answer

Total profit is the difference between total revenue and total cost.

Correct AnswerverifiedShow Answer

Distinguish the difference between the market demand curve and the demand curve that a particular firm in the industry faces.Why are the two curves different?

Correct AnswerverifiedThe market demand curve is a downward sl...View AnswerShow Answer

The production decision is the:

Correct AnswerverifiedShow Answer

A perfectly competitive firm is a price taker because:

Correct AnswerverifiedShow Answer

Market supply in a competitive market is determined by:

Correct AnswerverifiedShow Answer

The number and relative size of firms in an industry is the definition of:

Correct AnswerverifiedShow Answer

In perfect competition,price is determined by the market and individual firms have no control over price.

Correct AnswerverifiedShow Answer

If the market supply curve shifts to the left,explain in terms of the market supply determinants what would have to change to cause that shift.

Correct AnswerverifiedIn order for the market supply curve to ...View AnswerShow Answer

A monopoly is a single firm that produces the entire market supply of a particular good or service.

Correct AnswerverifiedShow Answer

Which of the following characterizes a perfectly competitive market?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Since apple producers operate in a compe...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The market demand curve is a downward sl...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In order for the market supply curve to ...
View Answer

Correct Answer
verified

Correct Answer
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