Question 1 M

Multiple choice (one answer) Points: 1

Table 2
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity

Total Revenue

Total Cost

$0

$3

$7

$5

$14

$8

$21

$12

$28

$17

$35

$23

$42

$30

$49

$38

Refer to Table 2. The firm will not produce an output level beyond

Select one:
5 units

7 units
4 units
6 units

When price is greater than marginal cost for a firm in a competitive market,

Select one: OPPORTUNITIES

the firm must be minimizing its losses.

there are opportunities to increase profit by increasing production.

the firm should decrease output to maximize profit.

marginal cost must be falling.

Question 3
Multiple choice (one answer) Points: 1 Marginal
For a firm in a perfectly competitive market, the price of the good is always
Select one:
equal to marginal revenue.

equal to total revenue.

greater than average revenue.

equal to the firms efficient scale of output.

Question 4
True or false Points: 1
In competitive markets, firms that raise their prices are typically rewarded with larger
profits.F
True

False

Question 5
Multiple choice (one answer) Points: 1
Table 3 6 units
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity

Total Revenue

Total Cost

$0

$3

$7

$5

$14

$8

$21

$12

$28

$17

$35

$23

$42

$30

$49

$38

Refer to Table 3.

In order to maximize profits, the firm will produce

Select one:

1 unit of output because marginal cost is minimized.

4 units of output because marginal revenue exceeds marginal cost.

6 units of output because marginal revenue equals marginal cost.

8 units of output because marginal revenue equals marginal cost.

Submit

Question 6
Multiple choice (one answer) Points: 1 17

6u

Table 1
Suppose that a firm in a competitive market faces the following revenues and costs:
Marginal

Marginal

Quantity

Cost

Revenue

12

$5

$9

13

$6

$9

14

$7

$9

15

$8

$9

16

$9

$9

17

$10

$9

1. If the firm is currently producing 14 units, what would

you advise the owners? increase quantity to 17 units
Refer to Table

Select one:

increase quantity to 16 units

decrease quantity to 13 units

continue to operate at 14 units

increase quantity to 17 units

Question 7
Multiple choice (one answer) Points: 1
Figure 1
Suppose a firm operating in a competitive market has the following cost curves:

17. Refer to Figure 1. If the market price is PhP10, what is the firms short-run economic profit?

Select one:

PhP15
PhP9

Submit

Question 8
Multiple choice (one answer) Points: 1 influence
A car dealer that has market power can
Select one:
ignore profit-maximizing strategies when setting the price for its cars.

reduce its advertising budget more so than its competitors.

minimize costs more efficiently than its competitors.

influence the market price for the car it sells.

Question 9
Multiple choice (one answer) Points: no one
In a perfectly competitive market,

no one seller can influence the price of the

product.
Select one:
all are correct.
price exceeds marginal revenue for each unit sold.
average revenue exceeds marginal revenue for each unit sold.
no one seller can influence the price of the product.

Question 10
True or false Points: 1

For a firm operating in a perfectly competitive industry, marginal revenue and average
revenue are equal.
True

TRUE

False

Question 11
Multiple choice (one answer) Points: 1 Mximize

Firms that operate in perfectly competitive markets try to maximize profits.

Select one:
maximize revenues.
equate marginal revenue with average total cost.
maximize profits.
All are correct.
Submit

Submit

Question 12

Multiple choice (one answer) Points: 1

Figure 1
Suppose a firm operating in a competitive market has the following cost curves:

Refer to Figure 1. If the\a market price is PhP10, what is the firms total cost?

Select one:
PhP35
PhP15
PhP60
PhP30

Question 13
True or false Points: 1
A profit-maximizing firm in a competitive market will decrease production when marginal
cost exceeds average revenue.
True

False

FALSE

Question 14 raise
Multiple choice (one answer) Points: 1
When firms have an incentive to exit a competitive market, their exit will
Select one:
lower the market price.

raise the profits of the firms that remain in the market.

necessarily raise the costs for the firms that remain in the market.

shift the demand for the product to the left.

Question 15
Multiple choice (one answer) Points: 1
Suppose a firm in a competitive market produces and sells 150 units of output
and earns PhP1,800 in total revenue from the sales. If the firm increases its output
to 200 units, total revenue will be PhP2,400.
Select one:
PhP4,200.

1,800X200/ 150

PhP2,400.

PhP2,000.

Can't be computed.

Question 16
Multiple choice (one answer) Points: 1
Figure 1
Suppose a firm operating in a competitive market has the following cost curves:

Refer to Figure

1. If the market price is PhP10, what is the firms total revenue?

Select one:
PphP15
PhP50
PhP30
PhP35

Question 17

Multiple choice (one answer) Points: 1

Figure 1
Suppose a firm operating in a competitive market has the following cost curves:

Refer to Figure 1. The firm will earn zero economic profit if the market price is

Select one:
PhP10
PhP7
PhP0
PhP6

Question 18
Multiple choice (one answer) Points: sell identical

A basic characteristic of a competitive market is that

Select one:
firms have price setting power.

producers sell nearly identical products.

firms minimize total costs.

government antitrust laws regulate competition.

Question 19
Multiple choice (one answer) Points: 1 supply
Entry into a market by new firms will increase the
Select one: supply of the good.
profits of existing firms.

supply of the good.

marginal cost of producing the good.

price of the good.

Question 20
Multiple choice (one answer) Points: 1
By comparing marginal revenue and marginal cost, a firm in a competitive market is able
to adjust production to the level that achieves its objective, which we assume to be
Select one:
minimizing average total cost.

minimizing variable cost.

maximizing profit.

maximizing total revenue.

Question 20
Multiple choice (one answer) Points: 1
By comparing marginal revenue and marginal cost, a firm in a competitive market is able
to adjust production to the level that achieves its objective, which we assume to be
Select one:
minimizing average total cost.

minimizing variable cost.

maximizing profit.

maximizing total revenue.

Question 21
True or false Points: 1
A firm operating in a perfectly competitive market may earn positive, negative, or zero
economic profit in the short run. true
True

False

Question 22
Multiple choice (one answer) Points: 1
The actions of any single buyer or seller In a competitive market will

negligible impact on the market price.

have a

Select one:
adversely affect the profitability of more than one firm in the market.

affect marginal revenue and average revenue but not price.

have little effect on market equilibrium quantity but will affect market equilibrium

price.
have a negligible impact on the market price.

Question 23
Multiple choice (one answer) Points: 1
When new firms enter a perfectly competitive market,

economic profits of existing

firms will continue to be zero.

Select one:
entering firms will earn zero economic profit upon entry into the market.

prices will rise as existing firms raise prices to keep new firms out of the market.
existing firms may see their costs rise if more firms compete for limited resources.
Submit

Question 24
Multiple choice (one answer) Points: 1
The intersection of a firm's marginal revenue and marginal cost curves determines the
level of output at which

profit is maximized.

Select one:
total revenue is equal to total cost.

total revenue is equal to variable cost.

total revenue is equal to fixed cost.

Question 25
True or false Points: 1
For a firm operating in a competitive market, both marginal revenue and average
revenue exceed the market price. false
True

False

Question 26
True or false Points: 1 TRUE

A profit-maximizing firm in a competitive market will increase production when average

revenue exceeds marginal cost.
True

False

Question 27
Multiple choice (one answer) Points: 1
Which of the following industries is most likely to exhibit the characteristic of free entry?
Select one:
dairy farming
airport security
nuclear power
municipal water and sewer
Submit

Question 28

Multiple choice (one answer) Points: 1

If a profit-maximizing firm in a competitive market discovers that, at its current
level of production, price is greater than marginal cost, it should

increase its

output.
Select one:
reduce its output but continue operating.

continue to produce at the current levels.

shut down.

Question 29
Multiple choice (one answer) Points: 1

When firms are said to be price takers, it implies that if a firm raises its
price, buyers will go elsewhere.
Select one:
competitors will also raise their prices.

buyers will go elsewhere.

buyers will pay the higher price in the short run.

firms in the industry will exercise market power.

Question 30 TRUE
True or false Points: 1
Because there are many buyers and sellers in a perfectly competitive market, no one
seller can influence the market price.
True

False

Question 1
Multiple choice (one answer) Points: 1
Table 3
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity

Total Revenue

Total Cost

$0

$3

$7

$5

$14

$8

$21

$12

$28

$17

$35

$23

$42

$30

$49

$38

Refer to Table 3. In order to maximize profits, the firm will produce

Select one:

4 units of output because marginal revenue exceeds marginal cost.

6 units of output because marginal revenue equals marginal cost.

1 unit of output because marginal cost is minimized.

8 units of output because marginal revenue equals marginal cost.

Question 2
Multiple choice (one answer) Points: 1
Figure 1
Suppose a firm operating in a competitive market has the following cost curves:

Refer to Figure 1. If the market price is PhP10, what is the firms total cost?

Select one:
PhP60
PhP15
PhP35
PhP30

Question 3
Multiple choice (one answer) Points: 1
In a perfectly competitive market,
Select one:
all are correct.

no one seller can influence the price of the product.

price exceeds marginal revenue for each unit sold.
average revenue exceeds marginal revenue for each unit sold.

Question 4
Multiple choice (one answer) Points: 1
By comparing marginal revenue and marginal cost, a firm in a competitive market is able
to adjust production to the level that achieves its objective, which we assume to be
Select one:
maximizing total revenue.
minimizing variable cost.
maximizing profit.
minimizing average total cost.

Question 5
Multiple choice (one answer) Points: 1
The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
Select one:
profit is maximized.
total revenue is equal to fixed cost.

total revenue is equal to total cost.

total revenue is equal to variable cost.

Question 6
True or false Points: 1
A firm operating in a perfectly competitive market may earn positive, negative, or zero economic profit in the short run.
True

False

A profit-maximizing firm in a competitive market will increase production when average revenue exceeds marginal
cost.
True

False

Question 8
Multiple choice (one answer) Points: 1
Firms that operate in perfectly competitive markets try to
Select one:
equate marginal revenue with average total cost.
All are correct.
maximize profits.
maximize revenues.

9. DAIRY FARM

Question 10
Multiple choice (one answer) Points: 1

Figure 1
Suppose a firm operating in a competitive market has the following cost curves:
17. Refer to Figure 1. If the market price is PhP10, what is the firms short-run economic profit?
Select one:
PhP15
PhP30
PhP50
PhP9

Question 11
Multiple choice (one answer) Points: 1
Table 1
Suppose that a firm in a competitive market faces the following revenues and costs:
Marginal

Marginal

Quantity

Cost

Revenue

12

$5

$9

13

$6

$9

14

$7

$9

15

$8

$9

16

$9

$9

17

$10

$9

Refer to Table 1. If the firm is currently producing 14 units, what would you advise the owners?

Select one:

decrease quantity to 13 units

increase quantity to 16 units

continue to operate at 14 units

Question 13
Multiple choice (one answer) Points: 1
When firms are said to be price takers, it implies that if a firm raises its price,
Select one:
firms in the industry will exercise market power.
competitors will also raise their prices.
buyers will pay the higher price in the short run.
buyers will go elsewhere.

In competitive markets, firms that raise their prices are typically rewarded with larger profits.
True

False