ECON910

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Author:
Anonymous
ID:
177106
Filename:
ECON910
Updated:
2012-10-11 20:18:10
Tags:
competitive firms
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Description:
Chapter 10 practice quiz
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  1. Assume a graph where dollars are measured on the vertical axis and output on the horizontal axis. For a purely competitive firm, total revenue:
    A. graphs as a straight, up-sloping line.
    B. is a straight line, parallel to the horizontal axis.
    C. graphs as a straight, down-sloping line.
    D. is a straight line, parallel to the vertical axis.
    A. graphs as a straight, up-sloping line.
    (this multiple choice question has been scrambled)
  2. A firm reaches a break-even point where:
    A. marginal revenue cuts the horizontal axis.
    B. marginal cost intersects the average variable cost curve.
    C. total revenue equals total variable cost.
    D. total revenue and total costs are equal.
    D. total revenue and total costs are equal.
    (this multiple choice question has been scrambled)
  3. A purely competitive seller's average revenue curve coincides with:
    A. neither its demand nor its marginal revenue.
    B. both its demand and marginal revenue curves.
    C. its marginal revenue curve only.
    D. its demand curve only.
    B. both its demand and marginal revenue curves.
    (this multiple choice question has been scrambled)
  4. In a purely competitve industry:
    A. there will be no economic profits in either the short run or the long run.
    B. economic profits may persist in the long run, if consumer demand is strong and stable.
    C. there may be economic profits in the short run, but not in the long run.
    D. there may be economic profits in the long run, but not in the short run.
    C. there may be economic profits in the short run, but not in the long run.
    (this multiple choice question has been scrambled)
  5. A purely competitive firm's shor-run supply curve is:
    A. perfectly elastic at the minimum average total cost.
    B. up-sloping and equal to the portion of the marginal cost curve which lies above the average variable cost curve.
    C. up-sloping and equal to the portion of the marginal cost curve which lies above the average total cost curve.
    D. up-sloping, only when the industry is characterised by constant costs.
    B. up-sloping and equal to the portion of the marginal cost curve which lies above the average variable cost curve.
  6. Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. On the basis of this information we can say that corporation:
    A. is realising a loss of $60.
    B. should close down in the short run.
    C. is maximising its profits.
    D. is realising an economic profit of $40.
    D. is realising an economic profit of $40.
    (this multiple choice question has been scrambled)
  7. The demand curve in a purely competitive industry is ________, while the demand curve to a single firm in that industry is ____________.
    A. Down-sloping, perfectly elastic.
    B. Perfectly elastic, down-sloping.
    C. perfectly inelastic, perfectly elastic.
    D. Down-sloping, perfectly inelastic.
    A. Down-sloping, perfectly elastic.
    (this multiple choice question has been scrambled)
  8. A competitive firm in the short-run can determine the profit-maximising (or loss-minimising) output by equating:
    A. Marginal revenue and marginal cost.
    B. Price and average total cost.
    C. Price and average fixed cost.
    D. Price and marginal revenue.
    A. Marginal revenue and marginal cost.
    (this multiple choice question has been scrambled)
  9. Assume a graph where dollars are measure on the vertical axis and output on the horizontal axis. For a purely competitive firm, marginal revenue:
    A. Graphs as a straight, down-sloping line.
    B. Is a straight line, parallel to the horizontal axis.
    C. Graphs as a straight, up-sloping line.
    D. Is a straight line, parallel to the vertical axis.
    B. Is a straight line, parallel to the horizontal axis.
    (this multiple choice question has been scrambled)
  10. In the short run, a purley competitive firm will always make an economic profit if:
    A. P>AVC
    B. P=ATC.
    C. P>ATC
    D. P=MC
    C. P>ATC
    (this multiple choice question has been scrambled)
  11. A firm finds that; its MR=MC output, its TC = $1000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
    A. Close down in the short run.
    B. Produce because it will realise and economic profit.
    C. Produce because the resulting loss is less than its TFC.
    D. Liquidate its assets and go out of business.
    C. Produce because the resulting loss is less than its TFC.
    (this multiple choice question has been scrambled)
  12. The demand schedule, or curve, confronted by the individual purely competitive firm is:
    A. Perfectly inelastic.
    B. Perfectly elastic.
    C. Relatively elastic; that is, the elasticity coefficient is greater than unity.
    D. Relatively inelastic; that is, the elasticity coefficient is less than unity.
    B. Perfectly elastic.
    (this multiple choice question has been scrambled)
  13. If a firm, in a purely competitive industry, is confronted with and equilibrium price of $5. Its marginal revenue:
    A. Will also be $5.
    B. May be either grater or less than $5.
    C. Will be less than $5.
    D. Will be greater than $5.
    A. Will also be $5.
    (this multiple choice question has been scrambled)

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