Which of the following does not characterize a perfectly competitive firm that has shut down in the short run?

 Question 1 options:

total revenue equals zero

variable costs equal zero

the firm suffers a loss

fixed cost is positive

fixed cost is zero

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 Question 2 (2.5 points)  

Perfectly competitive firms are price takers because

 Question 2 options:

all small firms must take the price set by the largest firm in the market

firms take the price that government determines is a “fair” price

each firm is small and goods are perfect substitutes for one another

free entry and exit in the short run creates a constant market price in the long run

high barriers to entry force firms to compete by charging lower prices than other firms in the industry

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 Question 3 (2.5 points)  

Exhibit 8-13

If the market price in Exhibit 8-13 is $6, what is the greatest possible short-run profit for this perfectly competitive firm?

 Question 3 options:

$3

$30

-$3

-$30

$20

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 Question 4 (2.5 points)  

If, as a firm increases its rate of output, total cost increases as well,

 Question 4 options:

profit cannot be maximized

revenue cannot be maximized

cost cannot be minimized

marginal cost is increasing

marginal cost is positive

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 Question 5 (2.5 points)  

Exhibit 8-3

Which point in Exhibit 8-3 indicates the quantity at which this firm will maximize profit?

 Question 5 options:

point a

point b

point c

point d

either point b or point d

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 Question 6 (2.5 points)  

Perfectly competitive firms respond to changing market conditions by varying their

 Question 6 options:

price

output

market share

information

advertising campaigns

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 Question 7 (2.5 points)  

Which of the following would not help identify market structure?

 Question 7 options:

number of firms in the industry

type of product produced in the industry

ease of entry into the industry

forms of competition among firms in the industry

price of the good

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 Question 8 (2.5 points)  

Which of the following is not characteristic of perfect competition?

 Question 8 options:

many buyers and sellers

brand name advertising

standardized products

fully informed buyers and sellers

free entry and exit of firms

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 Question 9 (2.5 points)  

Which of the following is not necessarily a characteristic of perfect competition?

 Question 9 options:

low prices

a large number of buyers and sellers

a homogeneous product

perfect information

easy entry and exit in the long run

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 Question 10 (2.5 points)  

Business-class airline tickets cost much more than coach-class tickets because, compared to householders, businesspeople’s demand for travel is

 Question 10 options:

equally elastic

unitary elastic

more elastic

less elastic

not a factor in the cost of airline tickets

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 Question 11 (2.5 points)  

In the short run, if a firm shuts down, its loss is equal to

 Question 11 options:

$0

its variable costs

its fixed costs

fixed costs minus variable costs

fixed costs minus total revenue

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 Question 12 (2.5 points)  

Exhibit 9-18

In Exhibit 9-18, how does market segment A differ from market segment B?

 Question 12 options:

demand is relatively more elastic in segment A than in segment B

demand is relatively more income elastic in segment A than in segment B

demand is relatively more income elastic in segment B than in segment A

there are more consumers in segment A than in segment B

demand is relatively more inelastic in segment A than in segment B

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 Question 13 (2.5 points)  

An industry consists of all firms that supply output to a particular market.

 Question 13 options:

True

False

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   Question 14 (2.5 points)  

Exhibit 9-1

Price

Quantity Demanded

$50  

2

40

3

30

4

20

5

10

6

In Exhibit 9-1, the marginal revenue of the sixth unit is

 Question 14 options:

$10

$60

$100

$40

-$40

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 Question 15 (2.5 points)  

From the following demand schedule for a monopolist, what is the marginal revenue associated with the sale of the fourth unit?

Price

Quantity

90

1

80

2

70

3

60

4

50

5

 Question 15 options:

$10

$30

$60

$240

marginal revenue cannot be determined from the information given

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 Question 16 (2.5 points)  

Monopolists always earn positive short-run economic profit.

 Question 16 options:

True

False

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 Question 17 (2.5 points)  

A natural monopoly results when a firm has

 Question 17 options:

a license

a patent

official approval to produce a product

decreasing average costs over the range of market demand

exclusive use of a natural resource

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 Question 18 (2.5 points)  

Exhibit 9-3

The profit-maximizing output and price for the firm in Exhibit 9-3, which charges the same price to all customers, are

 Question 18 options:

117 and $14

150 and $22

150 and $14

117 and $22

117 and $24

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 Question 19 (2.5 points)  

Exhibit 9-2

Quantity

Price

0

$7  

1

6

2

5

3

4

4

3

5

2

6

1

In Exhibit 9-2, the marginal revenue of the fourth unit is

 Question 19 options:

$12

$3

$4

-$4

$0

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 Questio 20 (2.5 points)  

Exhibit 9-3

The total revenue for the firm in Exhibit 9-3, a monopolist that maximizes profit while charging all customers the same price, is

 Question 20 options:

$2,574

$2,808

$2,100

$1,638

$3,300

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 Question 21 (2.5 points)  

For a monopolist, P < MR at all quantities.

 Question 21 options:

True

False

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 Question 22 (2.5 points)  

For a monopolist, if marginal revenue is $40, total revenue is

 Question 22 options:

increasing

decreasing

zero

positive

negative

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 Question 23 (2.5 points)  

Which of the following is true of monopoly?

 Question 23 options: