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)

Output Total cost (tons of rice per year) ( dollars per ton) $1,000 $1,200 $1,600 $2,200 $3,000 $4,000Output Total cost (tons of rice per year) ( dollars per ton) $1,000 $1,200 $1,600 $2,200 $3,000 $4,000Output Total cost (tons of rice per year) ( dollars per ton) $1,000 $1,200 $1,600 $2,200 $3,000 $4,0005 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)5 4 Price and costs (dollars per ticket) 3 MC 2 MR D O 20 40 60 80 100 120 Quantity (tickets per hour)MC ATC 10 AVC 8 Price and costs (dollars per unit) 6 4 2 MR D O 2 4 6 8 10 12 Quantity (units per day)MC ATC 10 AVC 8 Price and costs (dollars per unit) 6 4 2 MR D O 2 4 6 8 10 12 Quantity (units per day)MC ATC 10 AVC 8 Price and costs (dollars per unit) 6 4 2 MR D O 2 4 6 8 10 12 Quantity (units per day)MC ATC 10 AVC 8 Price and costs (dollars per unit) 6 4 2 MR D O 2 4 6 8 10 12 Quantity (units per day)