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Preguntas del test (54)
1If a firm is producing 12 pairs of skates at a price of $120, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- ATC=$1,080.
- BTC = $1,440.
- CThe firm is in long-run equilibrium.
- DProfit = $120.
- EProfit=$360.
2If a firm is producing 12 pairs of skates at a price of $120, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- ATC=$1,080.
- BTC = $1,440.
- CTC=$1,320.
- DThe firm is in long-run equilibrium
- EProfit=$360.
3If a firm is producing 12 pairs of skates at a price of $120, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- AIn the long-run firms will enter.
- BIn the short-run firms will exit.
- CThe firm is in long-run equilibrium.
- DIn the short-run firms will enter.
- EThe firm is making a profit equal to $360.
4If a firm is producing 9 pairs of skates at a price of $100, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- ATC=$990.
- BTC = $900.
- CThe firm is in long-run equilibrium.
- DThe firm is making a profit of $90.
- EThe firm should shutdown.
5If a firm is producing 9 pairs of skates at a price of $100, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- ATC=$900
- BTC = $810.
- CThe firm is in long-run equilibrium.
- DThe firm is making a loss of $90.
- EThe firm should shut down.
6 If a firm is producing 9 pairs of skates at a price of $100, an average total cost of $110, and an average variable cost of $90, which of the following is true?
- AIn the long-run firms will enter.
- BIn the long-run firms will exit.
- CThe firm is in long-run equilibrium.
- DIn the short-run firms will enter.
- EThe firm is making a profit loss to $180.
7In perfectly competitive markets, the market demand curve is
- Aperfectly elastic.
- Ba horizontal line at the market price.
- Cperfectly inelastic.
- Dnegatively sloped.
- Epositively sloped.
8In a perfectly competitive market, an increase in the market demand curve
- Awill cause economic dislocation to all firms.
- Bwill cause the market supply curve to decrease in the short-run.
- Cwill cause the market supply curve to increase in the short-run.
- Dwill decrease the price to all firms in the industry.
- ENone of the above.
9What prevents a single perfectly competitive firm from supplying the entire market?
- AThe price of the product.
- BThe market demand curve.
- CThe market supply curve.
- DCosts.
- ENone of the above.
10One-hour photo processing is an excellent example of
- Atoo many firms in an industry in the early 1980s.
- Bfirms always producing at zero economic profit.
- Cminimal barriers to entry.
- Dhuge firms being able to dominate the industry.
11The demand curve for a monopolistically competitive firm is
- Aperfectlyelastic.
- Ba horizontal line at the market price.
- Cperfectlyinelastic.
- Dnegatively sloped.
- Epositively sloped.
12Monopolistically competitive firms do not have the characteristic of
- Afree entry and exit.
- Bzero economic profits in the long-run.
- Coperating at minimum average total cost in the long-run.
- Dmany buyers and sellers.
- EAlloftheabove.
13Monopolistically competitive firms make life interesting because
- Athe firms always earn positive economic profits.
- Bthe firms increase the variety of products.
- Cthe firmware more efficient than perfectly competitive firms.
- Dthe firms operate at the monopoly price.
- ENoneoftheabove.
14In the very long run, monopolistically competitive markets operate like
- Aperfectly competitive firms and face,for all practical purposes,a horizontal demand curve.
- Ba monopoly and charge a high price for the differentiated product.
- Ca monopoly and make higher profits than perfectly competitive firms.
- Doligopolistic markets by colluding and charging the monopoly price.
- ENoneoftheabove.
15Price-taking behavior occurs when
- AP=MR.
- Bthe firm can sell all it wants at the market price.
- Cthe firm faces much competition it cannot control price.
- Dthere are a large number of sellers.
- EAlloftheabove.
16In the short run, the profit-maximizing rules are
- AP = minimum average cost and A TC = A VC.
- BP=ATC and AVC=MC.
- CP> ATC and P=MC.
- DP> AVC and P=MC.
- EP= AVC and P =MC.
17The long-run result of producing where P = MC in an industry where there is free entry or exit is
- Ain efficient production.
- Bpositive economic profit.
- Cnegative economic profit.
- Dzero economic profit.
- Ethe firm shuts down.
18In a perfectly competitive industry the fact that a typical firm’s product price is less than its average total cost
- Ais a signal for resources to eventually leave they industry.
- Bmeans firms will shut down in the short run.
- Cmeans firms are not producing where P=MC.
- Dcannot be true in the short run.
- EAlloftheabove.
19While the exit of firms from declining sectors of the economy generates job losses, an important lesson of the theory of competition is that
- Acompetition provides important patents and innovation for new products.
- Beconomies of scale are the norm in competitive industries.
- Cfirms typically earn positive economic rents from producing uncompetitive markets.
- Dresources leaving declining sectors of the economy find employment in expanding markets.
- Eproducer surplus a is good measure of the losses to society from declining industries.
20Assume that in a perfectly competitive industry that consists of 2,000 firms, each firm is making an economic profit of $10,000 per year. Which of the following predictions about this industry is likely to come true?
- AIn the long run, the industry will consist of less than 2,000firms.
- BIn the long run, economic profits will continue.
- CIn the long run,the price of this product will equal the minimum average cost of production.
- DIn the long run, the price of this product will be less than the minimum average variable cost of production.
- EAlloftheabove.
21The characteristics of a perfectly competitive industry are
- Aprice taking, homogeneous products, and significant barriers to entry.
- Badvertising and economies of scale.
- Cprice taking, homogeneous products,and ease of entry.
- Ddiseconomies of scale and high average fixed costs.
- Ehigh fixed costs and low variable costs.
22If a producing firm is able to quintuple its current level of production and still sell its output at the same price, the producer is
- Aa price searcher.
- Ba monopolist.
- Cproducing with rising average cost.
- Da single proprietorship.
- Ea price taker.
23It pays any firm to stay in business in the short run if
- AP exceeds AFC.
- BP is less than MC.
- CP is less than A VC.
- DP exceeds AVC.
24If the lowest average variable cost of a firm is $18 and the market price is $15, the firm should
- A(a) shutdown.
- B(b) produce between 5 and 10 units of output.
- C(c) makeaprofit.
- D(d) produce, even if it is losing money.
- E(e) produce,a long as marginal cost is less than $15
25Which of the following is correct? A perfectly competitive firm
- A(a) sets MR greater than MC.
- B(b) sets P greater than MC.
- C(c) does not produce if P is less than AVC.
- D(d) will not produce if all variable costs and some fixed costs are covered.
- E(e) Alloftheabove.
26In the long run, competitive firms produce at minimum average cost because
- Athey wish to serve society.
- Bonly if firms produce a minimum average cost can they maximize profit.
- Cthe mechanism off free entry and exit brings it about.
- Dsupply and demand always intersect at that price.
- EAlloftheabove.
27In the short run, the least important characteristic of perfect competition is
- Aa large number of sellers and buyers.
- Bhomogeneous product.
- Cthat buyers and sellers have perfect information regarding prices and quality.
- Dthat each seller is a price taker.
- Efreedom of entry into and exit from the industry.
28If a firm can sell all the output it wants at a price of $5 per unit, the firm’s
- A(a) marginalrevenueequals$5.
- B(b) marginal revenue can be negative at high levels of output.
- C(c) marginalrevenueexceeds$5.
- D(d) total revenue is $5.
- E(e) total revenue is constant as output rises.
29The supply curve for a firm in perfect competition in the short run
- A(a) depends on the industry’ s supply curve.
- B(b) depends on the industry’s demand curve.
- C(c) istheaverage-total-costcurve.
- D(d) is the marginal-cost curve above minimum average variable cost.
- E(e) is the average variable cost curve.
30When the price of a competitive industry’s product increases, producer surplus
- A(a) can decrease.
- B(b) must increase.
- C(c) increases if demand is inelastic.
- D(d) decreases if demand is elastic.
- E(e) increases if supply is price elastic
31In a competitive industry, a reduction in demand
- A(a) will increase the price of the product because of economies of scale.
- B(b) will reduce the price of the product.
- C(c) will create positive economic profits.
- D(d) cannot lower price in the short run but must in the long run.
- E(e) will raise price in the short run.
32Which of the following is correct? In a perfectly competitive industry with free entry,
- A(a) the number of firms is fixed in the long run.
- B(b) if P > AVC, the number of firms will increase.
- C(c) ifP>ATC, the number of firms will lincrease.
- D(d) if P < ATC, the number of firms will increase.
- E(e) ifP>MC,the number of firms will increase.
33Which of the following is a characteristic of perfect competition?
- A(a) Each seller is a pricetaker.
- B(b) Firms produce a homogeneous product.
- C(c) Thereisfreedomofentryintoandexitfromtheindustry.
- D(d) Each buyer and seller has perfect information about prices and product quality.
- E(e) Alloftheabove.
34According to the shutdown rule in perfect competition,
- A(a) if fixed costs are greater than variable costs for all levels of output, then the firm should shut down.
- B(b) if profits are negative, then the firm should shut down.
- C(c) if revenues are less than variable costs at all levels of output, then the firm should shut down.
- D(d) if the firm can’t cover its fixed costs, it should shut down.
- E(e) if the firm can’t cover its average total costs,it should shutdown.
35An important difference between perfect competition and monopolistic competition is that
- A(a) in monopolistic competition prices do not influence quantity demanded.
- B(b) in perfect competition all economic agents are price searchers.
- C(c) there is no competition under monopolistic competition.
- D(d) one produces a homogeneous product and the other produces a differentiated product.
- E(e) entry is free in competition but impossible in monopolistic competition.
36Which of the following is correct? For the perfectly competitive firm,
- A(a) price is greater than marginal revenue.
- B(b) price equals total cost.
- C(c) priceislessthanmarginalrevenue.
- D(d) profits will be maximized when price equals total cost.
- E(e) None of the above
37A perfectly competitive firm should produce at that quantity where price equals marginal cost unless
- A(a) revenues are less than variable costs at all levels of output.
- B(b) it is running a loss at that quantity.
- C(c) anticipates entry by new firms.
- D(d) the demand curve is perfectly elastic at the going market price.
- E(e) it is earning economic profits.
38As new firms enter a perfectly competitive market that is experiencing short-run positive economic profits,
- A(a) the demand curve will move up the supply curve,and prices will increase.
- B(b) the demand curve will move down the supply curve, and prices will fall.
- C(c) the supply curve will move to the right.
- D(d) the supply curve will move to the left.
- E(e) other firms will exit to maintain the equilibrium number of firms.
39In a perfectly competitive industry in the long run, if price fails to cover average costs,
- A(a) prices will eventually fall.
. - B(b) firms will enter the industry.
- C(c) the market supply curve will shift to the left.
- D(d) the market demand curve will shift to the right
- E(e) Alloftheabove.
- A(a) prices will eventually fall.
40Which of the following is correct? Increasing international trade has
- A(a) increased the relevance of the competitive model as a tool for explaining market behavior.
- B(b) had little impact on competition in U.S. markets.
- C(c) increased the relevance of the monopoly model as a tool for explaining market behavior.
- D(d) had little impact on competition in international markets.
- E(e) Noneoftheaboveistrue.
41A firm operating in a competitive industry
- A(a) will not experience diminishing returns in the shortrun.
- B(c) should shut down if P > AVC.
- C(d) has no control over market price.
- D(e) should produce only if economic profits are positive.
- E(b) cannot exit the industry in the long run.
42Suppose the pizza industry in the city where you are attending college approximates the conditions of a competitive industry. If a normal profit is 10%, a rate of return exceeding 10% would
- A(a) cause an increase in pizza prices.
- B(b) imply firms are experiencing economies of scale.
- C(c) suggest that firms are operating at minimum LRAC.
- D(d) mean that firms are earning zero economic profit.
- E(e) attract new firms to they industry.
43We would expect that free entry and exit in wheat production would ensure
- A(a) zero accounting profits.
- B(b) positive economic profits.
- C(c) price greater than marginal cost.
- D(d) zero economic profit.
- E(e) negative accounting profits.
44Which of the following is always correct? For a perfectly competitive firm producing a profit- maximizing output,
- A(a) total revenue sequel total costs.
- B(b) marginal cost equals average cost.
- C(c) price equals average variable cost.
- D(d) marginal revenue equals price.
- E(e) Noneoftheabove.
45For a perfectly competitive firm, the price elasticity of demand for the firm’s demand curve is
- A(a) infinite.
- B(b) less than 1.
- C(c) equal to 1.
- D(d) 0.
- E(e) greater than 1.
46Which of the following is correct? For a competitive industry,
- A(a) the markets demand is horizontal but the firm’s demand curve is downward-sloped.
- B(b) the market demand curve is downward-sloped but the firm’s demand curve is horizontal.
- C(c) the market and the individual firm’s demand curves are horizontal.
- D(d) the market and the individual firm’s demand curves are downward-sloped.
- E(e) Noneoftheabove.
47We would expect that free entry and exit in wheat production would (in the long run) ensure
- A(a) total revenues would equal all economic costs.
- B(b) marginal costs less than average costs.
- C(c) economic losses since quantity supplied exceeds quantity demanded.
- D(d) price equals average variable costs.
- E(e) positive economic profits necessary to cover the opportunity cost of capital.
48Which of the following is correct? In a competitive industry with economic losses,
- A(a) accounting profits are negative.
. - B(b) industry supply shifts to the left due to the exit of firms and losses are reduced
- C(c) entry by consumer swishing to take advantage of bargain-basement prices eliminates losses.
- D(d) accounting profits are positive.
- E(e) LRAC=MC.
- A(a) accounting profits are negative.
49A competitive firm that has zero economic profit will have a rate of return _____ that of comparable industries.
- A(a) much greater than
- B(b) greater than
- C(c) lessthan
- D(d) equal to
- E(e) that is indeterminate relative to
50Which of the following statements is correct for a profit-maximizing firm?
- A(a) IfMR>MC,the firm should decrease outputs since additional revenues exceed additional costs.
- B(b) If MR < MC, the firm should decrease output since additional revenues are less than additional costs.
- C(c) IfMR>MC,the firm should increase output since additional revenues are less than additional costs.
- D(d) If MR < MC, the firm should increase output since additional revenues are less than additional costs.
- E(e) Noneoftheabove.
51Assuming that each graph in Figure 6.1 represents a loss-minimizing competitive firm in the short- run, at the loss-minimizing output for each firm, which of the following is correct? (q* is the output at which MR = MC)
- A(a) The shaded area of Firm A correctly illustrates the firm’s loss,while the shaded area for FirmB
incorrectly illustrates the firm’s loss. - B(c) The shaded area for Firms A and B incorrectly illustrates the firm’s loss.
- C(d) The shaded area for Firm A incorrectly illustrates the firm’s loss, while the shaded area for Firm B correctly illustrates the firm’s loss.
- D(e) Noneoftheabove.
- E(b) The shaded area for Firms A and B correctly illustrates the firm’s loss.
- A(a) The shaded area of Firm A correctly illustrates the firm’s loss,while the shaded area for FirmB
52In Figure 6.1,
- A(a) Firm A is making a short-runloss.
- B(b) Firm B is making a short run loss.
- C(c) Firm A is making a short-run profit.
- D(e) Noneoftheabove.
- E(d) Firm B is making a short run profit.
53Assuming that each graph in Figure 6.2 above represents a loss-minimizing competitive firm in the short-run, at the loss-minimizing output for each firm, which of the following is correct? (q* is the output at which MR = MC)
- A(a) TheshadedareaforFirmAcorrectlyillustratesthefirm’sloss,whiletheshadedareaforFirmB
incorrectly illustrates the firm’s loss. - B(b) The shaded area for Firms A and B correctly illustrates each firm’s loss.
- C(c) TheshadedareaforFirmsAandBincorrectlyillustrateseachfirm’sloss.
- D(d) The shaded area for Firm A incorrectly illustrates the firm’s loss, while the shaded area for Firm
B correctly illustrates the firm’s loss. - E(e) Noneoftheabove.
- A(a) TheshadedareaforFirmAcorrectlyillustratesthefirm’sloss,whiletheshadedareaforFirmB
5455. In Figure 6.2,
- A(a) Firm A is making a short-run loss.
- B(b) Firm B is making a short run loss.
- C(c) FirmAismakingashort-runprofit.
- D(e) Noneoftheabove.
- E(d) Firm B is making a short run profit.
Información
- Descripción
- Test sobre Sin título, creado por Juan Encarnocion el 14/10/2015.
- Autor
- Juan Encarnocion
- Idioma
- English
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