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Econ201_2practice - Name Date ch11 1 An indifference curve...

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Practice Questions for Exam 2 Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Marginal utility can be thought of as 1) A) the additional cost of that next good purchased. B) the opportunity cost of buying the next good. C) the incremental change in a person's total satisfaction level from the buying of a good. D) the total change in satisfaction from buying a good. 2) The difference between the short run and the long run is 2) A) the short run is a period less than a year while the long run is a period greater than a year. B) economic profits are negative in the short run and positive in the long run. C) economic and accounting profits are not equal in the short run but are equal in the long run. D) that in the short run at least one factor of production cannot be varied while in the long run all factors of production can be varied. 3) A perfectly competitive market has 3) A) few firms. B) homogeneous products. C) to do a lot of advertising to attract buyers. D) high barriers to entry or exit. 4) Which of the following is a characteristic of perfect competition? 4) A) Easy entry and exit B) Differentiated products C) Few firms D) None of the above 5) All firms in a perfect competition industry 5) A) lose money. B) produce identical products. C) produce differentiated products. D) are price makers. 6) A market structure in which the decisions of individual buyers and sellers have no effect on market price is 6) A) oligopoly. B) monopoly. C) perfect competition. D) monopolistic competition. 7) The demand curve for a perfectly competitive industry is 7) A) perfectly inelastic. B) perfectly elastic. C) downward sloping. D) unit elastic. 8) The perfectly competitive firm faces 8) A) perfectly elastic demand. B) constant marginal costs. C) a downward sloping demand curve. D) a horizontal supply function. 9) A perfectly competitive firm faces a horizontal demand curve because it is 9) A) a price taker. B) a large firm in a small industry. C) one of few firms in the market. D) a price maker. 1
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10) A) should increase its output level. B) should reduce its output level. C) is sustaining economic loss. D) will not be covering its fixed cost. 11) The price per unit times the total quantity sold is 11) A) marginal revenue. B) price revenue. C) total revenue. D) average revenue. 12) When a firm is earning zero economic profits, 12) A) P = ATC. B) accounting profit is zero. C) P is greater than ATC. D) total revenue is greater than total cost. 13) In the above figure, at which output level is this firm earning negative economic profits? 13) A) 2 B) 12 C) 10 D) 5 14) Refer to the above figure. Line C in Panel B does not represent 14) A) total revenue. B) average revenue. C) marginal revenue.
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Econ201_2practice - Name Date ch11 1 An indifference curve...

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