1.A perfectly competitive market is one in which many firms produce many different varieties of the same product.

Group of answer choices

True

False

2.Which of the following is one of the necessary conditions for the perfect competition model to exist?

Group of answer choices

Total diminishing utility.

Differentiated products.

Large number of firms.

Upward sloping average fixed cost.

3.The existence of positive economic profits induces firms to:

Group of answer choices

enter an industry, which shifts the market supply curve to the left and decreases market price.

enter an industry, which shifts the market supply curve to the right and increases market price.

exit an industry, which shifts the market supply curve to the right and decreases market price.

enter an industry, which shifts the market supply curve to the right and decreases market price

4.If a firm in a perfectly competitive market model experiences a technological breakthrough:

Group of answer choices

other firms would not find out about it.

other firms would find out about it eventually.

some firms would find out about it but others would not.

other firms would find out about it immediately.

5.Each firm in the perfectly competitive market model:

Group of answer choices

follows the reactions of competitors.

follows the pricing decisions of other firms.

follows the output of other firms.

sets quantity based on market price.

6.Draw the perfectly competitive market model which reflect the following question and answer the question. In a perfectly competitive market model the demand curve of an individual firm is:

Group of answer choices

perfectly elastic.

perfectly inelastic.

7.Inputs are also known as factors of production. These are the inputs/factors which a firm needs when it will produce. For example, land, labor, and capital are inputs/factors.

Question: In the long run all inputs are variable; in the short run some inputs are fixed.

Group of answer choices

True

False