Microeconomics Ch 11

question

Select all that apply
Which of the following occur only in the long-run?
Multiple select question.
The entry and exit of firms
Price changes in response to demand
The reduction of output to zero
The expansion or contraction of plant capacity

answer

question

The long run, every purely competitive firm tends to operate at its ______.
Multiple choice question.
maximum ATC
minimum AVC
minimum AFC
minimum ATC

answer

question

__________ profits in a competitive industry will attract new firms into the industry.

answer

Economic

question

Select all that apply
There is no incentive for firms to enter or exit the industry in the long run when ______.
Multiple select question.
price equals minimum average total cost
firms earn a normal profit
firms earn a loss
MR = MC

answer

ABD

question

Select all that apply
Economic profit will fall to zero and firms will choose not to enter an industry when price is equal to which of the following factors?
Multiple select question.
Marginal cost
Minimum average total cost
Marginal utility

answer

question

The entry and the exit of firms in an industry are considered to be -__________ run adjustments.

answer

long

question

After all long-run adjustments are completed in a perfectly competitive market, output will occur at each firm's minimum average ______.
Multiple choice question.
variable cost where product price is equal to marginal revenue
total cost where product price is less than marginal revenue
total cost where product price is equal to marginal revenue
total cost where product price is greater than marginal revenue

answer

question

An unfavorable shift or ______ in demand will upset the original industry equilibrium and produce ______.
Multiple choice question.
decrease; losses
increase; profits
increase; losses
decrease; profits

answer

question

Economists maintain that new firms are attracted into an industry due to:
Multiple choice question.
normal profits
accounting profits
total revenues
economic profits

answer

question

Why will firms choose not to enter an industry when marginal revenue, marginal cost, price, and average total cost are equal?
Multiple choice question.
Any increase in production will shift the demand curve left.
Firms are losing money.
Existing firms are earning only normal profits.
Existing firms are earning economic profits.

answer

question

Select all that apply
Which of the following occur only in the long-run?
Multiple select question.
The entry and exit of firms
The expansion or contraction of plant capacity
Price changes in response to demand
The reduction of output to zero

answer

question

As firms exit the industry in the long run, market price rises and the losses for the remaining firms begin to subside. Firms will continue to exit until which of the following happens?
Multiple choice question.
Economic losses increase.
Price falls to zero.
There are no economic losses.
There is an economic profit.

answer

question

If demand for the good decreases creating economic losses, firms will exit the industry in the long run. As firms exit in the long run, industry supply will ______ and market price will ______.
Multiple choice question.
decrease; rise
increase; fall
increase; rise
decrease; fall

answer

question

All firms in a(n) ______ industry share the same basic efficiency characteristics.
Multiple choice question.
monopoly
oligopolistic
purely competitive
monopolistically competitive

answer

question

A competitive firm may realize an economic profit or loss in the _________ run but will earn only a normal profit in the _________ run.

answer

short, long

question

If there are losses in the long run, what adjustments will take place?
Multiple choice question.
Firms will exit the industry until losses are eliminated.
Firms will not make any adjustments and the market price will rise.
Firms will exit the industry until marginal cost is minimized.
Firms will enter the industry until profits are earned.

answer

question

Select all that apply
Competitive market economies generate ______.
Multiple select question.
productive efficiency
capital efficiency
time efficiency
allocative efficiency
quality efficiency

answer

question

Select all that apply
Whether a purely competitive industry is a constant-cost industry or an increasing-cost industry, the final long-run equilibrium position of all competitive firms share which of the following characteristics?
Multiple select question.
Price or marginal revenue will settle where it is equal to minimum average total cost.
Price or marginal revenue will settle where it is equal to minimum average variable cost.
In the long run, a multiple equality occurs where price equals marginal cost which equals the minimum average total cost.
In the long run, an equality occurs where price equals marginal revenue, which equals minimum average total cost.

answer

ACD

question

____________ (Allocative/Productive) efficiency means that goods are produced in the least costly way.

answer

Productive

question

In the long run, a purely competitive firm will only earn a ______ profit.
Multiple choice question.
economic
negative
constant
zero
normal

answer

question

___________ efficiency means that resources are distributed among firms and industries to yield a mix of goods and services that is most wanted by society.

answer

allocative

question

Which of the following describes consumer surplus?
Multiple choice question.
It is the difference between the maximum price that producers are willing to receive for a product and the market price for that product.
By replacing "consumers" in the sentence with "producers", this would define producer surplus.
It is the difference between the minimum price that consumers are willing to pay for a product and the market price for that product.
It is the difference between the maximum price that consumers are willing to pay for a product and the market price for that product.

answer

question

Why will firms choose not to enter an industry when marginal revenue, marginal cost, price, and average total cost are equal?
Multiple choice question.
Any increase in production will shift the demand curve left.
Firms are losing money.
Existing firms are earning economic profits.
Existing firms are earning only normal profits.

answer

question

True or false: Efficiency within pure competition can be temporarily disrupted by a change in consumer tastes.

answer

true

question

A competitive market generates _____ efficiency and ______ efficiency.

answer

productive, allocative

question

What must be eliminated or avoided if the "invisible hand" is to produce socially optimal outcomes in purely competitive markets?
Multiple choice question.
Economic surplus
Normal profits
Allocative efficiency
Externalities

answer

question

Productive efficiency requires that goods be produced:
Multiple choice question.
only with nonscarce resources.
using the least amount of resources.
in the least amount of time.
in the most costly way.
in the least costly way.

answer

question

Select all that apply
Which of the following statements are true about allocative efficiency?
Multiple select question.
The marginal cost and marginal benefit of producing each unit of output is equal.
The goods and services produced are those that society most wants to consume.
Producer surplus is maximized and consumer surplus is minimized.
It is impossible to produce net gains for society by altering the mix of goods and services produced.

answer

ABD

question

The difference between the maximum price a consumer is willing to pay for a product and the actual price that they do pay is known as _____.
Multiple choice question.
consumer surplus
economic surplus
deadweight loss
producer surplus

answer

question

Select all that apply
In purely competitive markets, efficiency can be temporarily disrupted and then restored by changes in:
Multiple select question.
resource supplies.
consumer tastes.
consumer and producer surplus.
technological changes.

answer

ABD

question

Select all that apply
What are the effects of the "invisible hand" in a purely competitive economy?
Multiple select question.
Maximum profits for individual producers
Inefficient depletion of scarce resources
A lack of incentive for innovation or product improvement
Resource allocation that maximizes consumer satisfaction

answer

1 of 31

question

answer

question

The long run, every purely competitive firm tends to operate at its ______.
Multiple choice question.
maximum ATC
minimum AVC
minimum AFC
minimum ATC

answer

question

__________ profits in a competitive industry will attract new firms into the industry.

answer

Economic

question

answer

ABD

question

answer

question

The entry and the exit of firms in an industry are considered to be -__________ run adjustments.

answer

long

question

answer

question

answer

question

Economists maintain that new firms are attracted into an industry due to:
Multiple choice question.
normal profits
accounting profits
total revenues
economic profits

answer

question

answer

question

answer

question

answer

question

answer

question

All firms in a(n) ______ industry share the same basic efficiency characteristics.
Multiple choice question.
monopoly
oligopolistic
purely competitive
monopolistically competitive

answer

question

A competitive firm may realize an economic profit or loss in the _________ run but will earn only a normal profit in the _________ run.

answer

short, long

question

answer

question

Select all that apply
Competitive market economies generate ______.
Multiple select question.
productive efficiency
capital efficiency
time efficiency
allocative efficiency
quality efficiency

answer

question

answer

ACD

question

____________ (Allocative/Productive) efficiency means that goods are produced in the least costly way.

answer

Productive

question

In the long run, a purely competitive firm will only earn a ______ profit.
Multiple choice question.
economic
negative
constant
zero
normal

answer

question

___________ efficiency means that resources are distributed among firms and industries to yield a mix of goods and services that is most wanted by society.

answer

allocative

question

answer

question

Why will firms choose not to enter an industry when marginal revenue, marginal cost, price, and average total cost are equal?
Multiple choice question.
Any increase in production will shift the demand curve left.
Firms are losing money.
Existing firms are earning economic profits.
Existing firms are earning only normal profits.

answer

question

True or false: Efficiency within pure competition can be temporarily disrupted by a change in consumer tastes.

answer

true

question

A competitive market generates _____ efficiency and ______ efficiency.

answer

productive, allocative

question

answer

question

answer

question

answer

ABD

question

answer

question

answer

ABD

question

answer

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Microeconomics Ch 11

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