Question
Question 1 (1 point) Perfect competition is an industry with a many firms producing identical goods. b a few firms producing goods that differ somewhat
Question 1 (1 point)
Perfect competition is an industry with
a | many firms producing identical goods. |
b | a few firms producing goods that differ somewhat in quality. |
c | a few firms producing identical goods. |
d | many firms producing goods that differ somewhat. |
Question 2(1 point)
In perfect competition, the product of a single firm
a | is sold under many differing brand names. |
b | has many perfect substitutes produced by other firms. |
c | has many perfect complements produced by other firms. |
d | is sold to different customers at different prices. |
Question 3(1 point)
In perfect competition, restrictions on entry into an industry
a | do not exist. |
b | apply to labor but not to capital. |
c | apply to capital but not to labor. |
d | apply to both capital and labor |
Question 4(1 point)
The price elasticity of demand for any particular perfectly competitive firm's output is
a | less than 1. |
b | infinite. |
c | equal to zero. |
d | 1. |
Question 5(1 point)
The demand for wheat from farm A is perfectly elastic because wheat from farm A is a(n)
a | perfect complement to wheat from farm B. |
b | normal good. |
c | perfect substitute for wheat from farm B. |
d | inferior good. |
Question 6(1 point)
A perfectly competitive firm's demand curve is
a | the same as the market demand curve. |
b | downward sloping. |
c | perfectly inelastic. |
d | the same as the firm's marginal revenue curve. |
Question 7(1 point)
In perfect competition, the price of the product is determined where the industry
a | average variable cost equals the industry average total cost. |
b | fixed cost is zero. |
c | supply curve and industry demand curve intersect. |
d | elasticity of supply equals the industry elasticity of demand. |
Question 8(1 point)
Economists assume that a perfectly competitive firm's objective is to maximize its
a | revenue. |
b | quantity sold. |
c | output price. |
d | economic profit. |
Question 9(1 point)
Total economic profit is
a | marginal revenue divided by marginal cost. |
b | total revenue minus total opportunity cost. |
c | marginal revenue minus marginal cost. |
d | total revenue divided by total cost. |
Question 10(1 point)
The economic profit of a perfectly competitive firm
a | is less than its total revenue if its supply curve is inelastic and is greater than its total revenue if its supply curve is elastic. |
b | is greater than its total revenue. |
c | is less than its total revenue. |
d | equals its total revenue. |
Question 11(1 point)
In perfect competition, a firm that maximizes its economic profit will sell its good
a | above the market price. |
b | at the market price. |
c | below the market price. |
d | below the market price if its supply curve is inelastic and above the market price if its supply curve is elastic. |
Question 12(1 point)
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