Market structure quiz 18/20 (90%)

   
Question 1
Question text
All of the following are characteristics of a perfectly competitive market except which one?
Select one:
A.
no transaction costs
B.
homogeneous goods
C.
barriers to entry
D.
many buyers and sellers
Clear my choice
Question 2
Question text
Which of the following is an example of a perfectly competitive market?
Select one:
A.
the market for paper towels
B.
the market for designer jeans
C.
the market for laundry detergent
D.
the market for soybeans
Clear my choice
Question text
In a competitive market, buyers have ________ impact on the market price and sellers have ________ impact on the market price.
Select one:
A.
some; some
B.
no; some
C.
no; no
D.
some; no
Clear my choice
Question 4
Question text
The market for jeans is not perfectly competitive because ________.
Select one:
A.
jeans are not a homogeneous good
B.
there are few buyers
C.
there are few sellers
D.
sellers are price takers
Clear my choice
Question 5
Question text
If a firm is a price taker, this means that the firm ________.
Select one:
A.
has market power
B.
has transaction costs
C.
has the ability to change the price of the good or service
D.
has no ability to change the price of the good or service
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Question 6
Question text
Which of the following is an example of a homogeneous good?
Select one:
A.
jeans
B.
sunglasses
C.
smart phones
D.
yellow onions
Clear my choice
Question 7
Question text
To maximize profits, a manager must select the quantity of output that ________.
Select one:
A.
maximizes the difference between total revenue and total cost
B.
maximizes the difference between total revenue and marginal cost
C.
maximizes the difference between marginal revenue and marginal cost
D.
maximizes the difference between marginal revenue and total cost
Clear my choice
Question 8
Question text
A perfectly competitive firm is producing 700 units, which is their profit-maximizing output level. The market price for their good is $2 and the firm’s average total cost to produce the 700 units is $0.50. What is their profit or loss from producing the 700 units?
Select one:
A.
-$1,050
B.
$1,050
C.
-$1,750
D.
$1,750
Clear my choice
Question 9
Question text
  
Quantity
Total Cost
 
495
1500
 
496
1505
 
497
1512
 
498
1520
 
499
1530
 
500
1545
 
501
1562
 
502
1580
The table above shows the total cost for Happy Cows, a perfectly competitive dairy farm, at various levels of production. The market price for Happy Cows dairy is $10 per unit of dairy product. 
Refer to the table above. What is the marginal revenue of producing the 500th unit of dairy product?
Select one:
A.
$10
B.
$5,000
C.
$1,545
D.
$15
Clear my choice
Question 10
Question text
  
Quantity
Total Cost
 
495
1500
 
496
1505
 
497
1512
 
498
1520
 
499
1530
 
500
1545
 
501
1562
 
502
1580
The table above shows the total cost for Happy Cows, a perfectly competitive dairy farm, at various levels of production. The market price for Happy Cows dairy is $10 per unit of dairy product. 
Refer to the table above. What is the profit-maximizing output level for Happy Cows?
Select one:
A.
501
B.
500
C.
498
D.
499
Clear my choice
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Question 11
Question text
All of the following are true for a perfectly competitive firm’s demand curve except which one?
Select one:
A.
It is perfectly elastic.
B.
It is equal to the market price at all quantities.
C.
It is horizontal.
D.
It is equal to the market demand curve.
Clear my choice
Question 12
Question text
Perfectly competitive firms are earning economic profits at a market price of $5 and an average total cost of $4. If new firms enter and do not affect the cost for all firms, the market price will ________ until it reaches ________.
Select one:
A.
fall; $5
B.
fall; $4
C.
increase; $5
D.
increase; $4
Clear my choice
Question 13
Question text
In a perfectly competitive market, an increase in the market demand will shift the perfectly competitive firm’s ________ curve ________.
Select one:
A.
marginal cost; downward
B.
demand; downward
C.
demand; upward
D.
marginal cost; upward
Clear my choice
Question 14
Question text
In the short run, a decrease in the market demand will cause a(n) ________ in the market equilibrium price and a perfectly competitive firm’s demand and marginal revenue curve to shift ________.
Select one:
A.
increase; upward
B.
increase; downward
C.
decrease; upward
D.
decrease; downward
Clear my choice
Question 15
=Question text
In a perfectly competitive market, a decrease in the market demand will ultimately lead to ________ firms in the market and a ________ market equilibrium quantity.
Select one:
A.
fewer; higher
B.
more; higher
C.
more; lower
D.
fewer; lower
Question 16
Question text
In a perfectly competitive market, a decrease in the market demand will shift the perfectly competitive firm’s ________ curve ________.
Select one:
A.
marginal cost; downward
B.
marginal revenue; upward
C.
marginal cost; upward
D.
marginal revenue; downward
Clear my choice
Question 17
Question text
If a perfectly competitive firm is producing 200 units and, at the 200th unit, the difference between marginal revenue and marginal cost (MR – MC) is positive, which of the following is true?
Select one:
A.
The firm should decrease production to maximize profit.
B.
The firm should increase production to maximize profit.
C.
The 200th unit costs more to produce than the firm earns in revenue.
D.
The firm is maximizing profit.
Clear my choice
Question 18
Question text
Overexpansion can cause a perfectly competitive firm to ________.
Select one:
A.
produce at a quantity where the marginal revenue exceeds the firm’s average total cost
B.
earn economic profit
C.
incur economic losses
D.
produce at a quantity where the market price exceeds the firm’s average total cost
Clear my choice
Question 19
Question text
The cycle of increased market demand that leads to ________ and then a(n) ________ in market price has caused many firms bankruptcy.
Select one:
A.
underexpansion; decrease
B.
underexpansion; increase
C.
overexpansion; decrease
D.
overexpansion; increase
Clear my choice
Question 20
Question text
If the market price is $3 and a perfectly competitive firm is producing 2,200 units and the marginal cost to produce the 2,200th unit is $2.85, which of the following is true?
Select one:
A.
The firm should decrease production to maximize profit.
B.
The firm should increase production to maximize profit.
C.
The firm is maximizing profit.
D.
The difference between marginal revenue and marginal cost (MR – MC) for the 2,200th unit is negative.
Clear my choice