Quiz
chapter 12 econ
Create a free account to finish this quiz
Save your progress and see your final score.
Already have an account? Sign in
Questions in this quiz (28)
1Which of the following is not a characteristic of a perfectly competitive market structure?
- AThere are no restrictions to entry by new firms
- BThere are restrictions on exit of firms.
- CAll firms sell identical products
- DThere are a very large number of firms that are small compared to the market
2Perfect competition is characterized by all of the following except
- Ahomogeneous products
- Bheavy advertising by individual sellers
- Csellers are price takers
- Da horizontal demand curve for individual sellers
3Both individual buyers and sellers in perfect competition
- Acan influence the market price by joining with a few of their competitors
- Bhave to take the market price as a given
- Chave the market price dictated to them by government
- Dcan influence the market price by their own individual actions
4The price of a seller's product in perfect competition is determined by
- Athe individual demander
- Ba few of the sellers
- Cmarket demand and market supply
- Dthe individual seller
5An individual seller in perfect competition will not sell at a price lower than the market price because
- Ademand is perfectly inelastic
- Bthe seller would start a price war
- Cthe seller can sell any quantity she wants at the prevailing market price
- Ddemand for the product will exceed supply.
6The demand curve for each seller's product in perfect competition is horizontal at the market price because
- Aall the sellers get together and set the price
- Ball the demanders get together and set the price
- Ceach seller is too small to affect market price
- D the price is set by the government.
7A perfectly competitive firm has to charge the same price as every other firm in the market. Therefore, the firm
- Afaces a perfectly elastic supply curve
- Bis not able to make a profit in the short run
- Cis a price taker
- Dfaces a perfectly inelastic demand curve
8Which of the following is not an assumption of perfectly competitive markets?
- AThe products sold by all firms in the market are identical.
- BThere are no barriers to new firms entering the market
- CEach firm produces a similar but not identical product
- DThere are many sellers and many buyers, all of which are small relative to the market
9If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
- A$5
- B$12.50
- C$25
- D$125
10Refer to Figure 12-1. If the firm is producing 700 units
- A it is making a loss
- Bit should cut back its output to maximize profit
- Cit is making a profit
- Dit should increase its output to maximize profit.
11 If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing it, the firm
- Ahas minimized its losses.
- Bis maximizing marginal profit
- Cadded more to total revenue than it added to total cost
- Dadded more to total costs than it added to total revenue
12 If, for a perfectly competitive firm, price exceeds the marginal cost of production, the firm should
- Areduce its output
- Bkeep output constant and enjoy the above normal profit.
- Clower the price
- Dincrease its output.
13Marginal revenue is
- Athe change in total revenue divided by the change in the quantity of output
- Bthe change in profit divided by the change in the quantity of output.
- Ctotal revenue divided by the total quantity of output
- Dthe change in total revenue divided by the change in total cost
14In a graph that illustrates a perfectly competitive firm, marginal revenue is
- Aa diagonal line that lies below the firm's demand curve
- Bthe same as the firm's demand curve
- Ca line that intersects the firm's demand curve from below at its lowest point.
- Da line that intersects the firm's average total cost curve from below at its lowest point.
15Producing where marginal revenue equals marginal cost is equivalent to producing where
- Aaverage total cost equals average revenue
- Baverage fixed cost is minimized
- Ctotal profit is maximized.
- Dtotal revenue is equal to total cost
16Refer to Figure 12-3. Suppose the prevailing price is P1 and the firm is currently producing its loss-minimizing
quantity. Identify the area that represents the loss- AP3cbP1
- BP2 deP1
- CP3caP0
- D0P1 bQ1
17Refer to Figure 12-5. If the market price is $20, what is the firm's profit-maximizing output?
- A750
- B1100
- C1350
- D1800
18Refer to Figure 12-5. If the market price is $20, what is the amount of the firm's profit?
- A5400
- B6750
- C8100
- D16200
19Refer to Figure 12-5. What is the amount of the firm's fixed cost of production?
- A5400
- B6750
- C8100
- Dcant be determined
20Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost
(TC) and average total cost (ATC). Which of the following equations is equal to a firm's profit?- A(P × Q) - (P × ATC)
- BP - TC
- C (P × Q) - TC
- DP - ATC
21If price = marginal cost at the output produced by a perfectly competitive firm and the firm is earning an
economic profit, then- Aaverage total cost is at a minimum.
- Bmarginal revenue is less than price
- Ctotal revenue equals total cost.
- Dprice exceeds average total cost
22Refer to Figure 12-6. Jason is currently producing 20 thousand pounds of apples. To maximize his profit Jason
should- Aincrease production to the output rate indicated by point e
- Bkeep production at 20 thousand pounds
- Cdecrease production to the output rate indicated by point a.
- Dincrease production to the output rate indicated by point d.
23Refer to Figure 12-4. If the market price is $30, the firm's profit-maximizing output level is
- A0
- B130
- C180
- D240
24Refer to Figure 12-4. If the market price is $30 and if the firm is producing output, what is the amount of its total
variable cost?- A$7,200
- B$6,480
- C$5,400
- D$3,960
25Refer to Figure 12-4. If the market price is $30 and the firm is producing output, what is the amount of the
firm's profit or loss?- Aloss of $1,080
- Bprofit of $1,300
- Cprofit of $1,440
- Dloss of $2,520
26Which of the following terms would best describe the price elasticity of demand facing a perfectly competitive
firm?- Aperfectly elastic
- Belastic
- Cinelastic
- Dperfectly inelastic
- Eunit
27Using the schedule above, profit maximization occurs
- Aat the thirteenth unit of production.
- Bat the eighth unit of production
- Cat an output level not shown
- Dat the sixteenth unit of production
28Refer to the above figure. When the price in the market is $4, economic profits will equal
- A100
- B400
- C300
- D200
Information
- Description
- Quiz on chapter 12 econ, created by April Woolley on 08/04/2015.
- Author
- April Woolley
- Language
- English
- Views
- 0
- History
- Created on 8 Apr 2015 · updated on 19 Feb 2016
- Rating
- No ratings yet Rate this quiz