1, In purely competitive markets, productive (or technical) efficiency is achieved:

	A.	When firms are in equilibrium, there is no entry of firms into (or exit of firms from) the industry.
	B.	When firms are in equilibrim and the price is equal to their marginal cost.
	C.	when firms are in equilibrium and produce at the lowest average (or per unit) cost.
	D.	When firms are in equilibrium and they are earning normal profits.

2, In purely competitive markets,allocative efficiency is achieved when:

	A.	When firms are in equilibrium, there is no entry of firms into (or exit of firms from) the industry.
	B.	When firms are in equilibrium, they produce at the lowest average (or per unit) cost.
	C.	When firms are in equilibrium andP = MC.
	D.	When all the firms in the industry are earning normal profits.

3, For the next 4 questions,refer to Graph A.

TOL TIC TICAT 4 questions, ICICI TO Graph A. ? At the price P 1, this firm will produce: O A. 0 (zero) units of output O B. C units of output O Ce units of output O D. none of the above