Question Question 1 of 19 5.0 Points The representative firm in a purely competitive industry:

04 Jun Question Question 1 of 19 5.0 Points The representative firm in a purely competitive industry:

Question
Question 1 of 19
5.0 Points

The representative firm in a purely competitive industry:

A.Will always earn a profit in the short run

B.May earn either an economic profit or a loss in the long run

C.Will always earn an economic profit in the long run

D.Will earn an economic profit of zero in the long run

Question 2 of 19

5.0 Points

An example of a monopolistically competitive industry would be:

A.Steel

B.Soybeans

C.Electricity

D.Retail clothing

Question 3 of 19

5.0 Points

Firms in an industry will not earn long-run economic profits if:

A.Fixed costs are zero

B.The number of firms in the industry is fixed

C.There is free entry and exit of firms in the industry

D.Production costs for a given level of output are minimized

Question 4 of 19

5.0 Points

Marginal product is:

A.the increase in total output attributable to the employment of one more worker.

B.the increase in total revenue attributable to the employment of one more worker.

C.the increase in total cost attributable to the employment of one more worker.

D.total product divided by the number of workers employed.

Question 5 of 19

5.0 Points

The law of diminishing returns indicates that:

A.as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point.

B.because of economies and diseconomies of scale a competitive firm’s long-run average total cost curve will be U-shaped.

C.the demand for goods produced by purely competitive industries is downsloping.

D.beyond some point the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.

Question 6 of 19

5.0 Points

If average total cost is declining, then:

A.marginal cost must be greater than average total cost.

B.the average fixed cost curve must lie above the average variable cost curve.

C.marginal cost must be less than average total cost.

D.total cost must also be declining.

Question 7 of 19

5.0 Points

Average fixed costs diminish continuously as output increases.

Correct

True

False

Question 8 of 19

5.0 Points

Patents and copyrights were established by the government to reduce oligopoly and monopoly power.

True

False

Question 9 of 19

5.0 Points

A purely competitive firm is a price maker, but a monopolist is a price taker.

True

False

Question 10 of 19

5.0 Points

The profit-maximizing rule MC = MR is followed by firms under:

A.monopolistic competition, but not perfect competition.

B.perfect competition, but not monopolistic competition.

C.either monopolistic competition or perfect competition, depending on the costs of production.