A. Select all of the answers that aretrue. That is, there may be more than one correct statement.

In the long run of a perfectly competitive market...

-Accounting profits (i.e.,revenues minus financial costs) for each firm equal zero

-Average total cost is minimized

-Market demand is perfectly elastic

-Consumer surplus is minimized

-Changes in demand will not change the market price

-Average fixed cost is increasing in quantity

B. Select all of the answers that aretrue. That is, there may be more than one correct statement.

Which of the following can result in deadweight losses?

-When a monopolist sets the market price

-When the market demand curve shiftsin a perfectly competitive market

-When there is an asymmetryin the information held by buyers and sellers

-When marginal cost curve shifts in a perfectly competitive market

-When a non-binding price ceiling is implemented

C. Select all of the answers that aretrue. That is, there may be more than one correct statement.

Singer andsongwriterJoni Mitchellrecently received two offers for the rights to her music. EMI offered her$50million for the rights, while Universal offered her a contract where she would get $300million if there are 1,000,000 streams of his songs.

Which of the following are true?

-If Joni thinks she will sell more than 1,000,000 streams 10% of the time and signs with EMI, then shemustbe risk averse

-If Joni thinks she will sell more than 1,000,000 streams 10% of the time and signs with Universal, then shemustbe risk averse

-If Joni thinks she will sell more than 1,000,000 streams 50% of the time and signs with EMI, then shemustbe risk averse

-If Joni thinks she will sell more than 1,000,000 streams 50% of the time and signs with Universal, then shemustbe risk averse

D. Select all of the answers that aretrue.That is, there may be more than one correct statement.

Supposethe grocery store market is perfectly competitive. Which of the following could explain a grocery store deciding to shut down in the short run?

-Market demand shifting up and to the right

-Market demand shifting down and to the left

-An increase in fixed costs

-Marginal cost shifting up and to the right

-Marginal cost shifting down and to the left