Ch08 - CHAPTER 8 Profit Maximization and Competitive Supply...

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Unformatted text preview: CHAPTER 8 Profit Maximization and Competitive Supply MULTIPLE CHOICE Section 8.1 easy 1. A price taker is a. a firm that accepts different prices from different customers. b. a consumer who accepts different prices from different firms. c. a perfectly competitive firm. d. a firm that cannot influence the market price. e. Both (c.) and (d.) . easy 2. Which of following is an example of a homogeneous product? a. gasoline b. copper c. personal computers d. winter parkas e. Both (a.) and (b.) easy 3. Which of following is a key assumption of a perfectly competitive market? a. Firms can influence market price b. Commodities have few sellers c. It is difficult for new sellers to enter the market. d. Each seller has a very small share of the market. e. None of the above. 13 CHAPTER 8 TEST BANK PROFIT MAXIMIZATION AND COMPETITIVE SUPPLY SIXTH EDITION SECTION 8.2 easy 4. If managers do not choose to maximize profit, but pursue some other goal such as revenue maximization or growth, a. they are more likely to become takeover targets of profit-maximizing firms. b. they are less likely to be replaced by stockholders. c. they are less likely to be replaced by the board of directors. d. they are more likely to have higher profit than if they had pursued that policy explicitly. e. their companies are more likely to survive in the long run. easy 5. Owners and managers a. must be the same people. b. may be different people with different goals, and in the long run firms that do best are those in which the managers are allowed to pursue their own independent goals. c. may be different people with different goals, but in the long run firms that do best are those in which the managers pursue the goals of the owners. d. may be different people with different but exactly complementary goals. e. may be different people with the same goals. moderate 6. The textbook for your class was not produced in a perfectly competitive industry because a. there are so few firms in the industry that market shares are not small, and firms' decisions have an impact on market price. b. upper-division microeconomics texts are not all alike. c. it is not costless to enter or exit the textbook industry. d. of all of the above reasons. moderate 7. If any of the assumptions of perfect competition are violated, a. supply-and-demand analysis cannot be used to study the industry. b. graphs with flat demand curves cannot be used to study the firm. c. graphs with downward-sloping demand curves cannot be used to study the firm. d. there may still be enough competition in the industry to make the model of perfect competition usable. e. one must use the monopoly model instead. 14 TEST BANK CHAPTER 8 SIXTH EDITION PROFIT MAXIMIZATION AND COMPETITIVE SUPPLY moderate 8. The "perfect information" assumption of perfect competition includes all of the following except one. Which one?...
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Ch08 - CHAPTER 8 Profit Maximization and Competitive Supply...

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