1.Which of the following is one of the necessary conditions for perfect competition?

Group of answer choices

Indivisible set up costs.

Large number of firms.

Diminishing utility.

Differentiated products.

2. Barriers to entry:

Group of answer choices

exist only in perfectly competitive markets.

do not affect the number of firms in an industry.

restrict the number of firms in an industry.

limit output in an industry.

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

Group of answer choices

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

other firms would find out about it eventually.

other firms would not find out about it.

other firms would find out about it immediately.

4. In a perfectly competitive market the demand curve faced by an individual firm is:

Group of answer choices

perfectly inelastic.

perfectly elastic.

relatively inelastic.

relatively elastic.

5. If the marginal revenue of the last widget the firm produces is $50 and its marginal cost is $35, a firm should:

Group of answer choices

reconsider past production decisions.

increase production.

decrease production.

6. As long as marginal cost is below marginal revenue, a perfectly competitive firm should:

Group of answer choices

decrease production.

reconsider past production decisions.

increase production.

hold production constant.

7. The foregone income that the owner of a business could have made by spending time working in another job is called:

Group of answer choices

explicit cost.

opportunity cost.

total cost.

marginal cost.

8. A business produces 400 items and sells them for $15 each for a total of $6,000. The total cost of producing the items is $4,500 explicit cost and $1,000 implicit cost. Economic profit is:

Group of answer choices

$1,000.

$0.

$1,500.

$500.

9. Implicit and explicit revenues minus implicit and explicit costs equals:

Group of answer choices

implicit profit.

accounting profit.

zero profit.

economic profit.

10. The difference between economic profit and accounting profit is equal to:

Group of answer choices

implicit and explicit costs.

implicit and explicit revenues

implicit revenues minus implicit costs.

zero.

11. The reason economists and accountants have problems using cost analysis in the real world is that

Group of answer choices

although explicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.

although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.

economists do not believe in the existence of explicit costs.

explicit costs cannot be measured.

12. The increase in output obtained by hiring an additional worker is known as:

Group of answer choices

the marginal product.

the total product.

the average product.