Micpt3 - Micro Pretest 3 Multiple Choice Identify the...

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Micro Pretest 3 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Which of the following is not a characteristic of perfect competition? a. Firms and consumers all have perfect information about the good and market. b. Sellers can enter the market easily. c. All goods sold are identical. d. All consumers have identical individual demand curves. ____ 2. Which of the following is closest to the economist's definition of perfect competition? a. the airline industry b. the soft drink industry c. the fishing industry d. the long-distance telephone service ____ 3. The competitive firm has no influence over price because a. its output is so insignificant relative to the market as a whole. b. anti-trust laws constrain perfectly competitive firms. c. consumers establish the prices of products. d. it doesn't know its demand curve. Figure 8-1 ____ 4. If the profit-maximizing firm depicted in Figure 8-1 is perfectly competitive, how much output should it pro- duce? a. A b. B c. C d. D Figure 8-3
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____ 5. In Figure 8-3, the perfectly competitive firm is realizing a a. loss equal to ABCE. b. profit equal to ABCE. c. profit equal to ABDF. d. loss equal to ABDF. ____ 6. The perfectly competitive firm's short-run shutdown rule is to shut down immediately if a. TR < TC. b. TR < SRFC. c. TR < SRVC. d. TR < MC > Q. ____ 7. The short-run supply curve of the competitive firm is the firm's a. MC curve. b. AVC curve. c. MC curve above the minimum point on the AVC curve. d. MC curve above the minimum point on the AFC curve. ____ 8. The difference between zero profit and zero economic profit is that a. economists include opportunity cost in zero economic profit, while accountants do not in- clude opportunity cost in zero profit. b. economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero profit. c. economists include opportunity cost in zero profit, while accountants do not include op- portunity cost in zero economic profit. d. economists do not include opportunity cost in zero profit, while accountants do include opportunity cost in zero economic profit. ____ 9. The entry of firms into a competitive industry causes the supply curve to a. increase its slope. b. decrease its slope. c. move farther toward the right. d. move toward the left. Figure 8-7
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____ 10. In Figure 8-7, the price at long-run equilibrium is a. $5. b.
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This test prep was uploaded on 04/04/2008 for the course ECON 201 taught by Professor Joyce during the Spring '07 term at Drexel.

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Micpt3 - Micro Pretest 3 Multiple Choice Identify the...

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