1.) What will be true when a perfectly competitive market reaches a long-run equilibrium?

Select one:

a.

some producers will be making normal profit; some will be making above-normal profit; and some will be making below-normal profit

b.

all producers will be making below-normal profit

c.

all producers will be making above-normal profit

d.

all producers will be making normal profit

2.)The pencil industry is perfectly competitive. What will happen in the short run if the demand for pencils decreases?

Select one:

a.

The number of producers will go down and supply will decrease

b.

The number of producers will go down and supply will not change

c.

The number of producers will not change and supply will decrease

d.

The number of producers will not change and supply will not change

3.)Suppose that the government provides vouchers to lower-income families to help them pay for the rent on apartments (the voucher acts like income that can only be spent on rent). What effect will these vouchers have?

Select one:

a.

Rents will increase and the equilibrium quantity of apartments will not change

b.

Rents will increase but the equilibrium quantity of apartments will decrease

c.

Rents will decrease but the equilibrium quantity of apartments will increase

d.

Rents will increase and the equilibrium quantity of apartments will also increase