QUESTION 1 In a perfectly competitive market, in the long run, the marginal cost

Question

QUESTION 1 In a perfectly competitive market, in the long run, the marginal cost of a firm becomes equal to its minimum average total cost. True False 3 points Saved QUESTION 2 Generally, The price a firm charges for its product is equal to its total revenue divided by the number of units sold. True False 4 points Saved QUESTION 3 In a perfectly competitive firm to maximize profit a firm must make sure that the price it charges does not exceed its marginal cost. True False 4 points Saved QUESTION 4 Firms in a competitive market can never make economic profits while they may make biasness (accounting) profits. True False 4 points Saved QUESTION 5 When a perfectly competitive firm is making a positive economic profit its average revenue must be greater than its average total cost. True False 4 points Saved QUESTION 6 To maximize its profit a firm always produces at the quantity level where it can charge the highest price and earn the greatest revenue; this strategy is consistent with setting is MC equal to price. True False 4 points Saved QUESTION 7 When a firm in a competitive market is making a positive economic profit its business profit may be positive or negative. True False 4 points Saved QUESTION 8 In a perfectly competitive market new entries could result in increases in input prices thus making production costs go up. True False 3 points Saved QUESTION 9 In a perfectly competitive market, in the long run, each firm produces the maximum amount it can produce and charges the lowest price possible. That is why we consider competitive markets efficient. True False 4 points Save Answer QUESTION 10 A monopolist always under-produces and charges a price higher than its MC. True False 4 points Saved QUESTION 11 As the only supplier in the market a monopolist can charge any price it wishes and buyers have no choice but to pay. True False 4 points Save Answer QUESTION 12 The marginal revenue is the additional revenue generated by the last unit of labor hired. True False 4 points Save Answer QUESTION 13 The price a monopolist charges may or may not be above its average cost but it is always above its MR. True False 4 points Save Answer QUESTION 14 When demand curve is a downward-sloping straight line (linear) marginal revenue will be greater than MC at all output leveles. True False 4 points Save Answer QUESTION 15 By setting its MR equal to its MC a monopolist determines the output that would maximize its profit. True False 4 points Save Answer QUESTION 16 In the long run each competitive firm would produce at the quantity level where its MC is equal to its MR as well as its ATC. True False 4 points Save Answer QUESTION 17 A monopoly always makes an economic profit. True False 4 points Save Answer QUESTION 18 When a monopoly's ATC is equal to the price it charges it is making normal economic profits. True False 4 points Save Answer QUESTION 19 When a monopoly is making a zero economic profit still its MR>ATC. True False 4 points Save Answer QUESTION 20 An increase in demand would enable a monopolist to raise its price while reducing its output. True False 4 points Save Answer QUESTION 21 The market supply curve in an increasing-cost industry is: A. a. upward sloping B. b. downward sloping C. c. vertical D. d. horizontal E. e. none of the above 4 points Save Answer QUESTION 22 The total producer surplus is measured by: A. a. the area between supply and demand curves. B. b. the difference between the price the consumer is willing and able to pay and the price suppliers wish to charge to maximize their profits. C. c. the area between the price consumers actually pay and the demand curve. D. d. the area between the equilibrium market price and the supply curve. E. e. the consumer willingness to pay as reflected by the equilibrium market price. 4 points Save Answer QUESTION 23 . Economists measure economic (social) welfare by the A. a. net consumer surplus B. b. sum of consumer and producer surplus C. c. sum of the net profits made by the industry's competitive firms D. d. price consumers are willing to pay for one additional unit of a good E. e. difference between the total consumer surplus and total producer surplus

Explanation / Answer

1. False.

2. True.

3. False.

4. False.

5. True.

6. False.

7. True.

8. True.

9. True.

10. True.

11. True.

12. False.

13. False.

14. False.

15. True.

16. True.

17. True.

18. True.

19. False.

20. True.

21. A. a. upward sloping.

22. D. d. the area between the equilibrium market price and the supply curve.

23. B. b. sum of consumer and producer surplus.

*****

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.