Ch.23 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. An industry comprised of four firms, each with about 25 percent of the total market for a product is an example of:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. Which of the following is not characteristic of pure competition?   (4 points)

    a.  
    b.  
    c.  
    d.  

  3. Which of the following is not a basic characteristic of pure competition?   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. For a purely competitive seller, price equals:   (4 points)

    a.  
    b.  
    c.  
    d.  

  5. Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run?   (4 points)

    a.  
    b.  
    c.  
    d.  

  6. In the short run a purely competitive firm will always make an economic profit if:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. If at the MC = MR output, AVC exceeds price:   (4 points)

    a.  
    b.  
    c.  
    d.  





  8. Refer to the above diagram. For any level of output, total fixed cost:   (4 points)

    a.  
    b.  
    c.  
    d.  





  9. Refer to the above diagram. The short-run supply curve for this firm is the:   (4 points)

    a.  
    b.  
    c.  
    d.  





  10. Refer to the above diagram. At P2, this firm will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. Answer the next question(s) on the basis of the following cost data for a purely competitive seller:



    Refer to the above data. If product price is $60, the firm will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. Answer the next question(s) on the basis of the following cost data for a purely competitive seller:



    The above data are for:   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:   (4 points)

    a.  
    b.  
    c.  
    d.  

  14. A constant-cost industry is one in which:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15. Assume that a decline in consumer demand occurs in a purely competitive industry which is initially in long-run equilibrium. We can:   (4 points)

    a.  
    b.  
    c.  
    d.  





  16. Refer to the above diagram showing the average total cost curve for a purely competitive firm. Suppose that average variable cost is $8 at 40 units of output. At that level of output, total fixed cost:   (4 points)

    a.  
    b.  
    c.  
    d.  





  17. Refer to the above diagram showing the average total cost curve for a purely competitive firm. At the long-run equilibrium level of output, this firm's economic profit:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. Allocative efficiency is achieved when the production of a good occurs where:   (4 points)

    a.  
    b.  
    c.  
    d.  



  19. Refer to the above diagram. At output level Q1:   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. If a purely competitive firm is producing where price exceeds marginal cost, then:   (4 points)

    a.  
    b.  
    c.  
    d.  




  21. (Last Word) Refer to the above graph of the market for asparagus. At the market price of $2, area A represents:   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. Price and marginal revenue are identical for an individual purely competitive seller.   (4 points)

    a.  
    b.  

  23. Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces to an efficient allocation of economic resources.   (4 points)

    a.  
    b.  



  24. Refer to the above diagram. At any price below R the firm will shut down in the short run.   (4 points)

    a.  
    b.  



  25. Refer the above diagram. If demand fell to the level of FNJ, there would be no output at which the firm could realize an economic profit.   (4 points)

    a.  
    b.  



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