Question;1.In which of the following industry structures is the entry of new firms the most difficult?A)pure monopolyB)oligopolyC)monopolistic competitionD)perfect competition?2.A one-firm industry is known as:A)monopolistic competitionB)oligopolyC)pure monopolyD)perfect competition?3.An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions is called:A)monopolistic competitionB)oligopolyC)pure monopolyD)perfect competition?4.Mutual interdependence would tend to limit control over price in which market model?A)monopolistic competitionB)perfect competitionC)pure monopolyD)oligopoly?5.In which two market models would advertising be used most often?A)perfect competition and monopolistic competitionB)perfect competition and pure monopolyC)monopolistic competition and oligopolyD)pure monopoly and oligopoly?6.Which characteristic would best be associated with perfect competition?A)few sellersB)price takerC)nonprice competitionD)product differentiation?7.A perfectly competitive seller is:A)both a "price maker" and a "price taker."B)neither a "price maker" nor a "price taker."C)a "price taker."D)a "price maker."?8.Which of the following is not a basic characteristic of perfect competition?A)considerable nonprice competitionB)no barriers to the entry or exodus of firmsC)a standardized or homogeneous productD)a large number of buyers and sellers?9.Which of the following is characteristic of a perfectly competitive seller's demand curve?A)Price and marginal revenue are equal at all levels of output.B)Average revenue is less than price.C)Its elasticity is "1" at all levels of output.D)It is the same as the market demand curve.?10.Average revenue is:A)total revenue minus total cost.B)marginal revenue minus marginal cost.C)marginal revenue divided by the quantity of output.D)total revenue divided by the quantity of output.?11.In perfect competition, the marginal revenue of a firm always equals:A)product price.B)total revenue.C)average total cost.D)marginal cost.?12.Firms seek to maximize:A)per unit profit.B)total revenue.C)total profit.D)market share.?13.A firm reaches a break-even point (firm makes normal profit) where:A)marginal revenue cuts the horizontal axis.B)marginal cost intersects the average variable cost curve.C)total revenue equals total variable cost.D)total revenue and total cost are equal.?14.In the short run a perfectly competitive firm which seeks to maximize profit will produce:A)where the demand and the ATC curves intersect.B)where total revenue exceeds total cost by the maximum amount.C)that output where economic profits are zero.D)at any point where the total revenue and total cost curves intersect.?15.In the short run, fixed costs for a profitable firm are:A)zero.B)negative.C)important determinants of the output level.D)irrelevant in determining the optimal level of output.?16.A firm should increase the quantity of output as long as its:A)marginal revenue is greater than its marginal cost.B)marginal cost is greater than its marginal revenue.C)average revenue is greater than its average total cost.D)average revenue is greater than its average variable cost.?17.A perfectly competitive seller should produce (rather than shut down) in the short run:A)only if total revenue exceeds total cost.B)only if total cost exceeds total revenue.C)if total revenue exceeds total cost or if total cost exceeds total revenue by some amount less than total fixed cost.D)if total cost exceeds total revenue by some amount greater than total fixed cost.?18.Assume the price of a product sold by a perfectly competitive firm is $5. Given the data in the accompanying table, at what output is total profit highest in the short run?A)20B)30C)40D)50?19.The Campus Crustacean Company receives $2 per box for its crawfish and is selling 1,600 boxes to maximize its profits. What is the per unit profit on a box of crawfish at the profit-maximizing level of output if the variable cost is $1 per box and fixed costs are $1,200?A)$.25.B)$.50.C)$1.00.D)$1.25.?20.If a perfectly competitive firm is producing at some level less than the profit-maximizing output, then:A)price is necessarily greater than average total cost.B)fixed costs are large relative to variable costs.C)price exceeds marginal revenue.D)marginal revenue exceeds marginal cost.?21.If a perfectly competitive firm is producing at the P = MC output and realizing an economic profit, at that output:A)marginal revenue is less than price.B)marginal revenue exceeds ATC.C)ATC is being minimized.D)total revenue equals total cost.?22.If a perfectly competitive firm shut down in the short run:A)its loss will be zero.B)it will realize a loss equal to its total variable costs.C)it will realize a loss equal to its total fixed costs.D)it will realize a loss equal to its total costs.?23.In the short run a perfectly competitive seller will shut down if:A)it cannot produce at an economic profit.B)price is less than average variable cost at all outputs.C)price is less than average fixed cost at all outputs.D)there is no point at which marginal revenue and marginal cost are equal.?24.If at the MC = MR output, AVC exceeds price:A)new firms will enter this industry.B)the firm should produce the MC = MR output and realize an economic profit.C)the firm should shut down in the short run.D)the firm should expand its plant.?25.In the short run a perfectly competitive seller will close down if product price:A)equals average revenue.B)is greater than MC.C)is less than AVC.D)is less than ATC.?26.A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output of 200 units is $4.00. The minimum possible average variable cost is $3.50. The market price of the product is $3.00. To maximize profit or minimize losses, the firm should:A)continue to produce 500 units.B)produce less than 500 units.C)produce more than 500 units.D)shut down.?27.The short-run supply curve for a competitive firm is the:A)entire MC curve.B)segment of the MC curve lying below the AVC curve.C)segment of the MC curve lying above the AVC curve.D)segment of the AVC curve lying to the right of the MC curve.?28.This pure competitive firm in the graph will not produce unless price equals at least:A)$2.B)$5.C)$7.D)$10.?29.Which point is definitely not on a competitive firm's short-run supply curve?A)AB)BC)CD)D?Use the following to answer questions 30-33:It shows cost data for a firm that is selling in a perfectly competitive market.?30.Refer to the table above. If the market price for the firm's product is $50, the competitive firm will:A)produce 1 unit.B)produce 2 units.C)produce 3 units.D)shut down.?31.Refer to the table above. If the market price for the firm's product is $70, the competitive firm will:A)produce 1 unit.B)produce 2 units.C)produce 3 units.D)shut down.?32.Refer to the table above. If the product price is $290, the per-unit economic profit at the profit-maximizing output is:A)$33.B)$76.C)$119.D)$152.?33.Refer to the table above. Now assume there are 100 identical firms in this industry, each of which has the same cost data as the single firm described above. Suppose too that the demand curve for this industry is as shown below:The equilibrium price will be:A)$140.B)$180.C)$230.D)$290.?34.Assume that the market for soybeans is perfectly competitive. Currently, firms growing soybeans are experiencing economic profits. In the long run, we can expect this market's:A)supply curve to increase.B)demand curve to increase.C)supply curve to decrease.D)demand curve to decrease.?35.Which of the following statements is correct?A)Economic profits induce firms to enter an industry, losses encourage firms to leave.B)Economic profits induce firms to leave an industry, profits encourage firms to leave.C)Economic profits and losses have no significant impact on the growth or decline of an industry.D)Normal profits will cause an industry to expand.?36.A perfectly competitive firm, as shown below, will face what kind of change in profits over the long run, assuming industry demand is constant?A)Profits will increase.B)Profits will decrease.C)Profits will be unchanged.D)Cannot be decided from the information given.?37.If a perfectly competitive constant-cost industry is realizing economic profits, we can expect industry supply to:A)increase, output to increase, price to decrease, and profits to decrease.B)increase, output to increase, price to increase, and profits to decrease.C)decrease, output to decrease, price to increase, and profits to increase.D)increase, output to decrease, price to decrease, and profits to decrease.?38.Which of the following statements is correct?A)The long-run supply curve for a perfectly competitive increasing-cost industry will be upward sloping.B)The long-run supply curve for a perfectly competitive increasing-cost industry will be perfectly elastic.C)The long-run supply curve for a perfectly competitive industry will be less elastic than the industry's short-run supply curve.D)The long-run supply curve for a perfectly competitive decreasing-cost industry will be upward sloping.?39.One explanation for the existence of an increasing-cost industry is:A)increasing marginal returns to labour occur.B)firms produce beyond the point of minimum long-run average total costs.C)perfectly elastic long-run supply schedules are observed in the industry.D)as the industry expands, input prices are bid up for some factor of production.
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