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1) The long-run market supply curve ? a. is always more elastic than the short-run market supply curve. b. is always perfectly elastic c. has the same elasticity as the short run market supply curve d. is always less elastic than the short-run market supply curve
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2) In the long run, the competitive firm’s supply curve is the ? a. entire marginal cost curve b. upward-sloping portion of the average total cost curve c. portion of the marginal cost curve that lies above the average total cost curve d. upward-sloping portion of the average variable cost curve e. portion of the marginal cost curve that lies above the average variable cost curve.
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3) If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost the firm could increase profit if it ? a. decreased production b. maintained production at the current level c. temporarily shut down. d. increased production
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4) For a competitive firm, marginal revenue is ? a. total revenue divided by the quantity sold b. equal to the quantity of the good sold c. average revenue divided by the quantity sold d. equal to the price of the good sold
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5) Which of the following market would most closely satisfy the requirements for a competitive market ? a. electricity b. cable television c. cola d. milk e. All of these answers represent competitive markets
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6) For a perfectly competitive firm ? a. Price equals marginal revenue b. price is greater than marginal revenue c. price equals total revenue d. price equals total cost
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7) In the short run firms in perfect competition will still produce provided ? a. The price covers average variable cost b. The price covers variable cost c. The price covers average fixed cost d. The price covers fixed costs
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8) In the long run in perfect competition ? a. The price equals the total revenue b. Firms are allocatively inefficient c. Firms are productively efficient d. The price equals total cost
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9) A profit maximizing firm is perfect competition produces where ? a. Total revenue is maximized b. Marginal revenue equals zero c. Marginal revenue equals marginal cost d. Marginal revenue equals average cost
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10) Firms in perfect competition face a? a. perfectly elastic demand curve b. perfectly inelastic demand curve c. perfectly elastic supply curve d. perfectly inelastic supply curve
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