江西某大学微观经济学试题库chapter12

Microeconomics9e(Parkin)

Chapter12PerfectCompetition

1WhatisPerfectCompetition?

1)Perfectcompetitionarisesiftheefficientscaleofasingleproduceris

relativetothedemandforthegoodorservice.

A)minimum;small

B)minimum;large

C)maximum;small

D)maximum;large

Answer:A

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

2)Whichofthefollowingistrueregardingaperfectlycompetitivefirm?

A)Thefirmcanchargealowerpricethanitscompetitorsandtherebysellmoreoutputand

increaseitsprofits.

B)Thefirmalwaysearnsanormalprofit.

C)Thefirm'smarginalrevenuecontinuallydecreases.

D)Thefirm'sminimumefficientscaleissmallrelativetothemarketdemand.

Answer:D

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

3)Thesmallestquantityofoutputatwhichlong-runaveragecostisataminimumisafirm's

A)maximumefficientscale

B)profit-maximizingoutputpoint

C)minimumefficientscale

D)efficientoutputpoint

Answer:C

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

4)Iftheminimumefficientscaleofafirmissmallrelativetothedemandfbrthegood,then

A)manysmallfirmscancompeteinthemarket.

B)severallargefirmswillenterthemarkettherebyreducingcompetition.

C)therewillbenoeconomicprofitsforanysmallfirms,sononewfirmswilleverenterthe

market.

D)thefirmsalreadyinthemarkethaveloweraveragetotalcostthananynewfirmenteringthe

market.

Answer:A

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

5)Inperfectcompetition,the

A)marketdemandforthegoodorserviceislargerelativetotheminimumefficientscaleofa

singleproducer.

B)marketdemandforthegoodorserviceissmallrelativetotheminimumefficientscaleofa

singleproducer.

C)marketdemandforthegoodorservicecanbesmallrelativetotheminimumefficientscaleof

asingleproduceraslongasthegoodsorservicesarenotidentical.

D)sizeofthemarketdemandfbrthegoodorservicerelativetotheminimumefficientscaleofa

singleproducerdoesnotaffectcompetition.

Answer:A

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

6)Whichofthefollowingconditionsisconsistentwithperfectcompetition?

A)Attemptsbyeachfirmtomaketheirproductdifferentfromproductsproducedbyotherfirms

reinforcescompetitionbetweenfirms.

B)Theminimumefficientscaleofasingleproducerissmallrelativetothedemandforthegood

orservice.

C)Newfirmsmustoperatemoreefficientlyinordertoovercomethecompetitiveadvantageof

existingfirms.

D)Sellersandbuyersarewellinformedaboutavailablequantitybutnotprices.

Answer:B

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

7)Inorderforperfectcompetitiontoarise,itmustbethecasethat

A)demandforthegoodorserviceislargerelativetotheminimumefficientscaleofanysingle

producer.

B)firmsproduceagoodorservicethatisidenticaltothoseofitscompetitors.

C)thetimeframeunderconsiderationisverylong.

D)BothanswersAandBarecorrect.

Answer:D

Topic:HowPerfectCompetitionArises

Skill:Recognition

AACSB:ReflectiveThinking

8)Inperfectcompetition,.

A)therearerestrictionsonentryintotheindustry

B)firmsintheindustryhaveadvantagesoverfirmsthatplantoentertheindustry

C)onlyfirmsknowtheircompetitors*prices

D)therearemanyfirmsthatsellidenticalproducts

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

9)Perfectcompetitionisanindustrywith

A)afewfirmsproducingidenticalgoods.

B)afewfirmsproducinggoodsthatdiffersomewhatinquality.

C)manyfirmsproducingidenticalgoods.

D)manyfirmsproducinggoodsthatdiffersomewhat.

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

10)Perfectcompetitionexistsinanindustryif

A)therearemanyfirmsproducinganidenticalproduct.

B)therearemanyfirmsproducingasimilarproduct,eachofwhichmayhaveuniquefeatures.

C)thefirmisprotectedbyabarriertoentry.

D)thefirmisalwaysatthebreak-evenpointwhereitisearningonlyanormalprofit.

Answer:A

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

11)Anindustryisperfectlycompetitiveif

A)eachfirminitcaninfluencethepriceofitsproduct.

B)therearemanyfirmsinit,eachsellingaslightlydifferentproduct.

C)therearemanyfirmsinit,eachsellinganidenticalproduct.

D)therearefewfirmsintheindustry.

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

12)Inaperfectlycompetitiveindustry,thereare

A)manybuyersandmanysellers.

B)manybuyers,buttheremightbeonlyoneortwosellers.

C)manysellers,buttheremightbeonlyoneortwobuyers.

D)onefirmthatsetsthepricefortheotherstofollow.

Answer:A

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

13)Inperfectcompetition,theproductofasinglefirm

A)hasmanyperfectsubstitutesproducedbyotherfirms.

B)hasmanyperfectcomplementsproducedbyotherfirms.

C)issoldundermanydifferingbrandnames.

D)issoldtodifferentcustomersatdifferentprices.

Answer:A

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

14)Whichofthefollowingisadefiningcharacteristicofaperfectlycompetitiveindustry?

A)advertisementsbywellknowncelebrities

B)persistenteconomicprofitsinthelongrun

C)norestrictionsonentryintotheindustry

D)higherpricesbeingchargedforcertainnamebrands

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

15)Whichofthefollowingistrueregardingperfectcompetition?

I.Thefirmsarepricetakers.

II.Marginalrevenueequalsthepriceoftheproduct.

III.Establishedfirmshavenoadvantageovernewfirms.

A)IandII

B)IIandIII

C)I,IIandIII

D)Ionly

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

16)Perfectcompetitionimpliesthat

A)therearemanyfirmsintheindustry.

B)allfirmsarepricetakers.

C)allfirmsareproducingthesameidenticalproduct.

D)Alloftheaboveanswersarecorrect.

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

17)Aperfectlycompetitiveindustryischaracterizedby

A)highbarrierstoentry.

B)firmsthatarepricesetters.

C)firmsfacingadownwardslopingdemandcurve.

D)easyentryintotheindustry.

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

18)Inperfectcompetition,restrictionsonentryintoanindustry

A)applytobothcapitalandlabor.

B)applytolaborbutnottocapital.

C)applytocapitalbutnottolabor.

D)donotexist.

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

19)WhichofthefollowingisNOTanassumptionofperfectcompetition?

A)manyfirms

B)manybuyers

C)restrictedentryintotheindustry

D)eachfirmsellsanidenticalproduct

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

20)WhichofthefollowingisNOTanassumptionofperfectcompetition?

A)Firmscompetebymakingtheirproductdifferentfromproductsproducedbyotherfirms.

B)Therearenorestrictionsonentryintotheindustry.

C)Establishedfirmshavenoadvantageovernewfirms.

D)Sellersandbuyersarewellinformedaboutprices.

Answer:A

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

21)WhichofthefollowingisNOTanassumptionofperfectlycompetitivemarkets?

A)manybuyersandmanysellers

B)norestrictiononentry

C)completeinformationaboutprices

D)newentrantshavehighercosts

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

22)WhichofthefollowingisNOTanassumptionofperfectcompetition?

A)Therearemanyfirms,eachsellinganidenticalproduct.

B)Therearemanybuyers.

C)Thepriceeachfirmsetsdiffersfromthepricessetbytheotherfirms.

D)Therearenorestrictionsonentryintotheindustry.

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

23)WhichofthefollowingisNOTadefiningcharacteristicofperfectlycompetitiveindustries?

A)manybuyersandsellers

B)unrestrictedentryandexit

C)consumerknowledgeaboutpriceschargedbyeachfirm

D)higherpricesbeingchargedforcertainnamebrands

Answer:D

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

24)WhichofthefollowingisNOTacharacteristicofaperfectlycompetitiveindustry?

A)Therearemanyfirms.

B)Therearenorestrictionsonentryintotheindustry.

C)Eachfirmproducesaslightlydifferentiatedproduct.

D)Eachfirmtakespriceasgiven,determinedbytheequilibriumofindustrysupplyandindustry

demand.

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

25)WhichofthefollowingisNOTacharacteristicofperfectcompetition?

A)Therearemanyfirms,eachsellinganidenticalproduct.

B)Therearemanybuyers.

C)Firmsintheindustryhaveanadvantageoverpotentialnewentrants.

D)Firmsandbuyersarewellinformedaboutthepricesoftheproductsofeachfirminthe

industry.

Answer:C

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

26)Anexampleofaperfectlycompetitiveindustryis

A)abigcitypolicedepartment.

B)themarketforcornintheUnitedStates.

C)themarketforFrenchimpressionists*paintings.

D)theNationalFootballLeague.

Answer:B

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

27)Anexampleofaperfectlycompetitivefirmis

A)anoatfarmerintheUnitedStates.

B)thelocalcableTVcompany.

C)aU.S.automobileproducer.

D)abigcitynewspaper.

Answer:A

Topic:PerfectCompetition

Skill:Recognition

AACSB:ReflectiveThinking

28)Inperfectcompetition,

A)eachfirmcaninfluencethepriceofthegood.

B)therearefewbuyers.

C)therearesignificantrestrictionsonentry.

D)allfirmsinthemarketselltheirproductatthesameprice.

Answer:D

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

29)Inperfectcompetition,eachfirm.

A)caninfluencethepricethatitcharges

B)producesasmuchasitcan

C)isapricetaker

D)facesaperfectlyinelasticdemandforitsproduct

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

30)Inaperfectlycompetitiveindustry

A)eachfirmsetsitsownpricesothatitisdifferentfromthepricesofitscompetitors.

B)earninganeconomicprofitiscertain.

C)eachfirmisapricetaker.

D)consumersbandtogethertodemandthelowestpricepossible.

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

31)Theassumptionthataperfectlycompetitiveindustryhasmanysellers,eachsellingan

identicalproduct,leadstotheconclusionthat

A)consumersgettoseeavarietyofoutputs.

B)therearemanybuyers.

C)theeconomicprofitwillbepositiveinthelongrun.

D)firmsarepricetakers.

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

32)Ifafirmisinaperfectlycompetitiveindustry,then

A)itcannotearnaneconomicprofitintheshortrun.

B)itwillhavenofixedcostsintheshortrun.

C)thedemandfbritsproductisperfectlyelastic.

D)itcannotsurviveinthelongrun.

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

33)Whenafirmisconsideredtobea"pricetaker"thatmeansthatthefirm

A)canchargeanypricethatitwantstocharge,thatis,"take"anypriceitwants.

B)paysafixedpricefbrallofitsinputs.

C)willaccept("take")thelowestpricethatitscustomersoffer.

D)cannotinfluencethemarketpriceofthegoodthatitsells.

Answer:D

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

34)Individualfirmsinperfectlycompetitiveindustriesarepricetakersbecause

A)thegovernmentsetsallprices.

B)buyerssetprices.

C)firmsdecidetogetheronthebestpricetocharge.

D)eachindividualfirmistoosmalltoaffectthemarketprice.

Answer:D

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

35)Inperfectcompetition,themarketdemandforthegoodperfectlyelasticandthe

demandfortheoutputofonefirmperfectlyelastic.

A)is;is

B)is;isnot

C)isnot;is

D)isnot;isnot

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

36)Inaperfectlycompetitivemarket,

A)eachfirmsetsitsownpricesothatitisdifferentfromitscompetitors.

B)aneconomicprofitiscertain.

C)eachfirmtakesthegood'spriceasgiventoitbythemarket.

D)consumersarepersuadedbyadvertising.

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

37)Pricetakingbehaviorexistsin

A)perfectlycompetitivemarkets.

B)marketswithamonopolist,whereconsumershavetotakepriceasitisgiventothembythe

monopolist.

C)automobilemarketswhereconsumershavetotakethepricesetbythedealer.

D)BothanswersBandCarecorrect.

Answer:A

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

38)Inperfectcompetition,anindividualfirm

A)setsthepriceanddeterminesthequantityitsellsinthemarketplace.

B)setsthepricebutdoesnotdeterminethequantityitsellsinthemarketplace.

C)determinesthequantityitsellsinthemarketplacebuthasnoinfluenceoveritsprice.

D)cannotaffectitspricenordeterminethequantityitsellsinthemarketplace.

Answer:C

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

39)Themarketforlawnservicesisperfectlycompetitive.Larry'sLawnServicecannotincrease

itstotalrevenuebyraisingitspricebecause.

A)Larry'ssupplyoflawnservicesisperfectlyinelastic

B)thedemandforLarry'sservicesisperfectlyinelastic

C)Larry'ssupplyoflawnservicesisinelastic

D)thedemandforLarry'sservicesisperfectlyelastic

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

40)Thepriceelasticityofdemandforanyparticularperfectlycompetitivefirm'soutputis

A)lessthan1.

B)1.

C)equaltozero.

D)infinite.

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

41)ThedemandforwheatfromfarmAisperfectlyelasticbecausewheatfromfarmAis

A)aperfectcomplementfbrwheatfromfarmB.

B)anormalgood.

C)aperfectsubstituteforwheatfromfarmB.

D)aninferiorgood.

Answer:C

Topic:PriceTakers

Skill:Analytical

AACSB:ReflectiveThinking

42)Inaperfectlycompetitiveindustry,thedemandforasinglefirm'sproductisperfectlyelastic

A)becausethisfirm'soutputisaperfectsubstitutefbranyotherfirm'soutput.

B)becausethisfirmisapricemaker.

C)onlyinthelongrun.

D)becausetherearemanybuyersinthismarket.

Answer:A

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

43)Inperfectcompetition,theelasticityofdemandfbrtheproductofasinglefirmis

A)0.

B)between0and1.

C)1.

D)infinite.

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

44)Inperfectcompetition,theelasticityofdemandfbrtheproductofasinglefirmis

A)zerobecausethefirmproducesauniqueproduct.

B)zerobecausemanyotherfirmsproduceidenticalproducts.

C)infinitebecausethefirmproducesauniqueproduct.

D)infinitebecausemanyotherfirmsproduceidenticalproducts.

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

45)Becauseeachperfectlycompetitivefirmsellsaproductidenticaltothatoftheotherfirms,

A)eachfirmtriestocutpricestoincreaseitsmarketshare.

B)eachfirm'soutputisaperfectsubstitutefbrtheoutputofanyotherfirm.

C)eachfirmexpectstoearnsomeeconomicprofit.

D)thedemandfbreachfirm*sproductisperfectlyinelastic.

Answer:B

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

46)Inperfectcompetition,eachindividualfirmfacesdemandcurve.

A)aninelastic

B)anupwardsloping

C)aperfectlyelastic

D)adownwardsloping

Answer:C

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

47)Inperfectcompetition,anindividualfirm

A)facesunitaryelasticityofdemand.

B)hasapriceelasticityofsupplyequaltoone.

C)facesaperfectlyelasticdemand.

D)hasperfectlyelasticsupply.

Answer:C

Topic:PriceTakers

Skill:Recognition

AACSB:ReflectiveThinking

48)Inaperfectlycompetitiveindustry,whichofthefollowingdeterminesthemarketprice?

A)marketdemandandafirm'ssupply

B)marketsupplyandafirm'sdemand

C)afirm'sdemandanditssupply

D)marketdemandandmarketsupply

Answer:D

Topic:PriceTakers

Skill:Conceptual

AACSB:ReflectiveThinking

49)Inaperfectlycompetitiveindustry,thedemandforasinglefirm'sproductis

A)perfectlyinelastic.

B)perfectlyelastic.

C)aselasticasthemarketdemand.

D)inelastic,butnotperfectlyinelastic.

Answer:B

Topic:MarketDemand/FirmDemand

Skill:Conceptual

AACSB:ReflectiveThinking

50)Themarketdemandforwheatisandthedemandforwheatproducedbyan

individualfarmis.

A)perfectlyelastic;perfectlyinelastic

B)notperfectlyelastic;perfectlyelastic

C)notperfectlyinelastic;inelastic

D)elastic;unitelastic

Answer:B

Topic:MarketDemand/FirmDemand

Skill:Conceptual

AACSB:ReflectiveThinking

51)IfSteve*sAppleOrchard,Inc.isaperfectlycompetitivefirm,thedemandforSteve*sapples

has

A)zeroelasticity.

B)unitaryelasticity.

C)elasticityequaltothepriceofapples.

D)infiniteelasticity.

Answer:D

Topic:MarketDemand/FirmDemand

Skill:Conceptual

AACSB:ReflectiveThinking

52)Inaperfectlycompetitiveindustry,thepriceelasticityofdemandforthemarketdemandis

andthepriceelasticityofdemandfbranindividualfirm*sdemandis.

A)infinite;infinite

B)lessthaninfinite;infinite

C)infinite;lessthaninfinite

D)lessthaninfinite;lessthaninfinite

Answer:B

Topic:MarketDemand/FirmDemand

Skill:Recognition

AACSB:ReflectiveThinking

53)Themarketforfishisperfectlycompetitive.So,thepriceelasticityofdemandforfishfroma

singlefishingboat

A)islessthantheelasticityofdemandforfishoverall.

B)equalstheelasticityofdemandforfishoverall.

C)isgreaterthantheelasticityofdemandforfishoverall.

D)issometimesgreaterthanandsometimeslessthantheelasticityofdemandforfishoverall.

Answer:C

Topic:MarketDemand/FirmDemand

Skill:Conceptual

AACSB:ReflectiveThinking

54)Inperfectcompetition,thepriceoftheproductisdeterminedwheretheindustry

A)elasticityofsupplyequalstheindustryelasticityofdemand.

B)supplycurveandindustrydemandcurveintersect.

C)averagevariablecostequalstheindustryaveragetotalcost.

D)fixedcostiszero.

Answer:B

Topic:MarketDemand/FirmDemand

Skill:Conceptual

AACSB:ReflectiveThinking

55)Economicprofitis.

A)includedinthefirm'stotalopportunitycost

B)equaltonormalprofitminustotalopportunitycost

C)equaltototalrevenueminusmarginalcost

D)equaltototalrevenueminustotalopportunitycost

Answer:D

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

56)Thedifferencebetweenafirm'stotalrevenueanditstotalopportunitycostisthefirm's

A)normalprofit.

B)economicprofit.

C)marginalprofit.

D)marginalrevenue.

Answer:B

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

57)Acompetitivefirm'stotalrevenueminusitstotalopportunitycostequalsits.

A)marginalrevenue

B)economicprofit

C)opportunitycost

D)normalprofit

Answer:B

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

58)Economistsassumethataperfectlycompetitivefirm'sobjectiveistomaximizeits

A)quantitysold.

B)economicprofit.

C)revenue.

D)outputprice.

Answer:B

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

59)Thegoalofaperfectlycompetitivefirmistomaximizeits

A)normalprofit.

B)revenue.

C)output.

D)economicprofit.

Answer:D

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

60)Totaleconomicprofitis

A)totalrevenueminustotalopportunitycost.

B)totalrevenuedividedbytotalcost.

C)marginalrevenueminusmarginalcost.

D)marginalrevenuedividedbymarginalcost.

Answer:A

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

61)Theeconomicprofitofaperfectlycompetitivefirm

A)islessthanitstotalrevenue.

B)equalsitstotalrevenue.

C)isgreaterthanitstotalrevenue.

D)islessthanitstotalrevenueifitssupplycurveisinelasticandisgreaterthanitstotalrevenue

ifitssupplycurveiselastic.

Answer:A

Topic:EconomicProfitandRevenue

Skill:Conceptual

AACSB:ReflectiveThinking

62)Inperfectcompetition,afirmthatmaximizesitseconomicprofitwillsellitsgoodataprice

thatis

A)belowthemarketprice.

B)atthemarketprice.

C)abovethemarketprice.

D)belowthemarketpriceifitssupplycurveisinelasticandabovethemarketpriceifitssupply

curveiselastic.

Answer:B

Topic:EconomicProfitandRevenue

Skill:Conceptual

AACSB:ReflectiveThinking

63)Thereturnthattheentrepreneurcanobtaininthebestalternativebusinessiscalledthe

A)normalprofit.

B)economicprofit.

C)marginalprofit.

D)marginalrevenue.

Answer:A

Topic:NormalProfit

Skill:Recognition

AACSB:ReflectiveThinking

64)Thefirm'sgoalisto

A)maximizeitsnormalprofit.

B)maximizeitseconomicprofit.

C)maximizeitstotalrevenue.

D)maximizeitsindustry'srevenue.

Answer:B

Topic:EconomicProfitandRevenue

Skill:Recognition

AACSB:ReflectiveThinking

65)Aperfectlycompetitivefirmhasatotalrevenuecurvethatis

A)upwardslopingwithanincreasingslope.

B)downwardslopingwithaconstantslope.

C)upwardslopingwithadecreasingslope.

D)upwardslopingwithaconstantslope.

Answer:D

Topic:TotalRevenue

Skill:Recognition

AACSB:ReflectiveThinking

66)Theabovefigureshowsafirm'stotalrevenueline.Thefirmmustbeinamarketwith

A)perfectcompetition.

B)monopolisticcompetition.

C)monopoly.

D)oligopoly.

Answer:A

Topic:TotalRevenue

Skill:Conceptual

AACSB:AnalyticalSkills

67)Foraperfectlycompetitivefirm,curveAintheabovefigureisthefirm's

A)totalfixedcostcurve.

B)averagefixedcostcurve.

C)averagevariablecostcurve.

D)totalrevenuecurve.

Answer:D

Topic:TotalRevenue

Skill:Recognition

AACSB:AnalyticalSkills

68)Thefigureaboveportraysatotalrevenuecurvefbraperfectlycompetitivefirm.CurveAis

straightbecausethefirm

A)isapricetaker.

B)facesconstantreturnstoscale.

C)wantstomaximizeitsprofits.

D)hasperfectinformation.

Answer:A

Topic:TotalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

69)Thefigureaboveportraysatotalrevenuecurveforaperfectlycompetitivefirm.Thefirm's

marginalrevenuefromsellingaunitofoutput

A)equals$0.50.

B)equals$1.00.

C)equals$2.00.

D)cannotbedetermined.

Answer:C

Topic:TotalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

70)Thefigureaboveportraysatotalrevenuecurveforaperfectlycompetitivefirm.Thepriceof

theproductinthisindustry

A)equals$0.50.

B)equals$1.0().

C)equals$2.00.

D)cannotbedetermined.

Answer:C

Topic:TotalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

71)Intheabovefigureshowingaperfectlycompetitivefirm'stotalrevenueline,thefirm's

marginalrevenue

A)fallsasoutputincreases.

B)doesnotchangeasoutputincreases.

C)risesasoutputincreases.

D)cannotbedetermined.

Answer:B

Topic:MarginalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

QuantitysoldPrice

5$15

6$15

7$15

72)Intheabovetable,ifthefirmsells5unitsofoutput,itstotalrevenueis

A)$15.

B)$30.

C)$75.

D)$90.

Answer:C

Topic:TotalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

73)Intheabovetable,ifthequantitysoldbythefirmrisesfrom5to6,itsmarginalrevenueis

A)$15.

B)$30.

C)$75.

D)$90.

Answer:A

Topic:MarginalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

74)Intheabovetable,ifthequantitysoldbythefirmrisesfrom6to7,itsmarginalrevenueis

A)$15.

B)$30.

C)$90.

D)$105.

Answer:A

Topic:MarginalRevenue

Skill:Analytical

AACSB:AnalyticalSkills

75)Marginalrevenueisequalto

A)totalrevenuedividedbyprice.

B)thechangeintotalrevenuedividedbytotaloutput.

C)thechangeintotalrevenuedividedbythechangeinquantitysold.

D)pricedividedbyquantitysold.

Answer:C

Topic:MarginalRevenue

Skill:Recognition

AACSB:ReflectiveThinking

76)Marginalrevenueisdefinedas

A)thevalueofafirm'ssales.

B)thetotalrevenuefromthetotalamountthefirmsells.

C)thechangeintotalrevenuethatresultsfromaone-unitincreaseinthequantitysold.

D)totalrevenuedividedbythetotalquantitysold.

Answer:C

Topic:MarginalRevenue

Skill:Recognition

AACSB:ReflectiveThinking

77)Inperfectcompetition,themarginalrevenueofanindividualfirm

A)iszero.

B)ispositivebutlessthanthepriceoftheproduct.

C)equalsthepriceoftheproduct.

D)exceedsthepriceoftheproduct.

Answer:C

Topic:MarginalRevenue

Skill:Recognition

AACSB:ReflectiveThinking

78)Inperfectcompetition,atallevelsofoutputthemarketpriceisthesameasthefirm's

A)marginalrevenue