Practice exam 4

question

Which of the following industries most closely approximates pure competition?

answer

agriculture

question

In which of the following industry structures is the entry of new firms the most difficult?

answer

pure monopoly

question

An industry comprising a very large number of sellers producing a standardized product is known as

answer

pure competition

question

The market for agricultural products such as wheat or corn would best be described by which market model?

answer

pure competition

question

Which of the following statements applies to a purely competitive producer?

answer

it will not advertise its products

question

A purely competitive seller is

answer

a "price taker"

question

Which of the following is true under conditions of pure competition?

answer

no single firm can influence the market price by changing its production level

question

Price is taken to be a "given" by an individual firm selling in a purely competitive market because

answer

each seller supplies a negligible fraction of the total market

question

The demand schedule or curve confronted by the individual, purely competitive firm is

answer

perfectly elastic

question

Which of the following is characteristic of a purely competitive seller's demand curve?

answer

price and marginal revenue equal at all levels of output

question

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below

answer

average variable cost

question

In the short run, a purely competitive seller will shut down if

answer

price is less than average total cost at all outputs

question

Long-run competitive equilibrium

answer

results in zero economic profits

question

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be

answer

higher, and total output will be larger than originally

question

Long-run adjustments in purely competitive markets primarily take the form of

answer

enter or exit of firms in the market

question

Long-run competitive equilibrium

answer

results in zero economic profits.

question

We would expect an industry to expand if firms in that industry are

answer

earning economic profits

question

In the accompanying diagram, if price is reduced fromP1toP2, total revenue will

answer

increase by c-a

question

Answer the question on the basis of the accompanying demand schedule.

Price Quantity Demanded
$ 7 1
6 2
5 3
4 4
3 5

The marginal revenue obtained from selling the third unit of output is

answer

question

Refer to the diagram for a nondiscriminating monopolist. Demand is elastic

answer

for all levels of output less than q2

question

Refer to the diagram for a nondiscriminating monopolist. Marginal revenue will be zero at output

answer

question

A pure monopolist should never produce in the

answer

inelastic segment of its demand curve because it can increase total revenue and reduce total cost by increasing price.

question

Assuming no change in product demand, a pure monopolist

answer

must lower price to increase sales

question

If a monopolist were to produce in the inelastic segment of its demand curve,

answer

the firm would not be maximizing profits

question

If a pure monopolist is operating in a range of output where demand is elastic,

answer

marginal revenue will be positive but declining

question

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its

answer

total variable costs

question

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation

answer

is realizing an economic profit of $40

question

A constant-cost industry is one in which

answer

100 units can be produced for $100, then 150 can be produced for $150, 200 for $200, and so forth.

question

A constant-cost industry is one in which

answer

resource prices remain unchanged as output is increased.

question

Suppose an increase in product demand occurs in a decreasing-cost industry. As a result,

answer

the new long run equilibrium price will be lower than the original long run equilibrium price

question

In the diagram, at output level Q1,

answer

neither productive nor allocative efficiency is achieved.

1 of 31

question

Which of the following industries most closely approximates pure competition?

answer

agriculture

question

In which of the following industry structures is the entry of new firms the most difficult?

answer

pure monopoly

question

An industry comprising a very large number of sellers producing a standardized product is known as

answer

pure competition

question

The market for agricultural products such as wheat or corn would best be described by which market model?

answer

pure competition

question

Which of the following statements applies to a purely competitive producer?

answer

it will not advertise its products

question

A purely competitive seller is

answer

a "price taker"

question

Which of the following is true under conditions of pure competition?

answer

no single firm can influence the market price by changing its production level

question

Price is taken to be a "given" by an individual firm selling in a purely competitive market because

answer

each seller supplies a negligible fraction of the total market

question

The demand schedule or curve confronted by the individual, purely competitive firm is

answer

perfectly elastic

question

Which of the following is characteristic of a purely competitive seller's demand curve?

answer

price and marginal revenue equal at all levels of output

question

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below

answer

average variable cost

question

In the short run, a purely competitive seller will shut down if

answer

price is less than average total cost at all outputs

question

Long-run competitive equilibrium

answer

results in zero economic profits

question

answer

higher, and total output will be larger than originally

question

Long-run adjustments in purely competitive markets primarily take the form of

answer

enter or exit of firms in the market

question

Long-run competitive equilibrium

answer

results in zero economic profits.

question

We would expect an industry to expand if firms in that industry are

answer

earning economic profits

question

In the accompanying diagram, if price is reduced fromP1toP2, total revenue will

answer

increase by c-a

question

Answer the question on the basis of the accompanying demand schedule.

Price Quantity Demanded
$ 7 1
6 2
5 3
4 4
3 5

The marginal revenue obtained from selling the third unit of output is

answer

question

Refer to the diagram for a nondiscriminating monopolist. Demand is elastic

answer

for all levels of output less than q2

question

Refer to the diagram for a nondiscriminating monopolist. Marginal revenue will be zero at output

answer

question

A pure monopolist should never produce in the

answer

inelastic segment of its demand curve because it can increase total revenue and reduce total cost by increasing price.

question

Assuming no change in product demand, a pure monopolist

answer

must lower price to increase sales

question

If a monopolist were to produce in the inelastic segment of its demand curve,

answer

the firm would not be maximizing profits

question

If a pure monopolist is operating in a range of output where demand is elastic,

answer

marginal revenue will be positive but declining

question

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its

answer

total variable costs

question

answer

is realizing an economic profit of $40

question

A constant-cost industry is one in which

answer

100 units can be produced for $100, then 150 can be produced for $150, 200 for $200, and so forth.

question

A constant-cost industry is one in which

answer

resource prices remain unchanged as output is increased.

question

Suppose an increase in product demand occurs in a decreasing-cost industry. As a result,

answer

the new long run equilibrium price will be lower than the original long run equilibrium price

question

In the diagram, at output level Q1,

answer

neither productive nor allocative efficiency is achieved.

Continue to order Get a quote

Practice exam 4

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee