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Chapter 6 Study
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Questions in this quiz (15)
1An industry comprised of four firms, each with about 25 percent of the total market for a product, is an example of?
- Amonopolistic competition.
- Boligopoly.
- Cpure monopoly.
- Dpure competition
2Which of the following is not a characteristic of pure competition?
- APrice strategies by firms.
- BA standardized product.
- CNo barriers to entry.
- DA larger number of sellers.
3Which of the following is characteristic of a purely competitive seller's demand curve?
- APrice and marginal revenue are equal at all levels of output.
- BAverage revenue is less than price.
- CIts elasticity coefficient is 1 at all levels of output.
- DIt is the same as the market demand curve.
4If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:
- Amay be either greater or less than $5.
- Bwill also be $5.
- Cwill be less than $5.
- Dwill be greater than $5.
5The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.
- Aperfectly inelastic; perfectly elastic
- Bdownsloping; perfectly elastic
- Cdownsloping; perfectly inelastic
- Dperfectly elastic; downsloping
6A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating?
- Aprice and average total cost.
- Bprice and average fixed cost.
- Cmarginal revenue and marginal cost.
- Dprice and marginal revenue.
7A firm reaches a break-even point (normal profit position) where?
- Amarginal revenue cuts the horizontal axis.
- Bmarginal cost intersects the average variable cost curve.
- Ctotal revenue equals total variable cost.
- Dtotal revenue and total cost are equal.
8In the short run, the individual competitive firm's supply curve is that segment of the?
- Aaverage variable cost curve lying below the marginal cost curve.
- Bmarginal cost curve lying above the average variable cost curve.
- Cmarginal revenue curve lying below the demand curve.
- Dmarginal cost curve lying between the average total cost and average variable cost curves.
9Assume 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?
- Ashould close down in the short run.
- Bis maximizing its profits.
- Cis realizing a loss of $60.
- Dis realizing an economic profit of $40.
10If a purely competitive firm shuts down in the short run?
- Aits loss will be zero.
- Bit will realize a loss equal to its total variable costs.
- Cit will realize a loss equal to its total fixed costs.
- Dit will realize a loss equal to its explicit costs.
11In the short run, a purely competitive firm will always make an economic profit if?
- AP = ATC.
- BP > AVC.
- CP = MC.
- DP > ATC.
12A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should?
- Ashut down in the short run.
- Bproduce because the resulting loss is less than its TFC
- Cproduce because it will realize an economic profit.
- Dliquidate its assets and go out of business.
13If a purely competitive firm is producing at some level less than the profit-maximizing output, then?
- Aprice is necessarily greater than average total cost.
- Bfixed costs are large relative to variable costs.
- Cprice exceeds marginal revenue.
- Dmarginal revenue exceeds marginal cost.
14Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will?
- Arealize a profit of $4 per unit of output?
- Bmaximize its profit by producing in the short run.
- Cminimize its losses by producing in the short run.
- Dshut down in the short run.
15If a purely competitive firm is maximizing economic profit?
- Ait is necessarily maximizing per-unit profit.
- Bit may or may not be maximizing per-unit profit.
- Cthen per-unit profit will be minimized.
- Dit is necessarily overallocating resources to its product.
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- Quiz on Chapter 6 Study, created by Johnathan Hill on 13/04/2019.
- Author
- Johnathan Hill
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- English
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