ReviewCh14 - Chapater14 Multiple Choice Identify the choice...

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Chapater14 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Free entry is limited. d. Each firm chooses an output level that maximizes profits. ____ 2. Who is a price taker in a competitive market? a. buyers only b. sellers only c. both buyers and sellers d. neither buyers nor sellers ____ 3. Free entry means that a. the government pays any entry costs for individual firms. b. no legal barriers prevent a firm from entering an industry. c. a firm's marginal cost is zero. d. a firm has no fixed costs in the short run. Table 14-1 Quantity Total Revenue 0 $0 1 $7 2 $14 3 $21 4 $28 ____ 4. Refer to Table 14-1. For a firm operating in a competitive market, the price is a. $0. b. $7. c. $14. d. $21. ____ 5. Refer to Table 14-1. For a firm operating in a competitive market, the marginal revenue is a. $0. b. $7. c. $14. d. $21. ____ 6. Refer to Table 14-1. For a firm operating in a competitive market, the average revenue is a. $21. b. $14. c. $7. d. $0. Table 14-2
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Quantity Price 0 $13 1 $13 2 $13 3 $13 4 $13 5 $13 6 $13 7 $13 8 $13 9 $13 ____ 7. Refer to Table 14-2 . The price and quantity relationship in the table is most likely that faced by a firm in a a. monopoly. b. concentrated market. c. competitive market. d. strategic market. ____ 8. Refer to Table 14-2 . Over which range of output is average revenue equal to price? a. 1 to 5 b. 3 to 7 c. 5 to 9 d. Average revenue is equal to price over the entire range of output. ____ 9. Refer to Table 14-2 . Over what range of output is marginal revenue declining? a. 1 to 6 b. 3 to 7 c. 7 to 9 d. None; marginal revenue is constant over the entire range of output. ____ 10. Refer to Table 14-2 . If the firm doubles its output from 3 to 6 units, total revenue will a. increase by less than $39. b. increase by exactly $39. c. increase by more than $39. d. It cannot be determined from the information provided. Table 14-4 Quantity Total Revenue Total Cost 0 $0 $3 1 $7 $5 2 $14 $8 3 $21 $12 4 $28 $17 5 $35 $23 6 $42 $30 7 $49 $38 ____ 11. Refer to Table 14-4. A firm operating in a competitive market and facing the total costs listed in the table will not produce an output level beyond a. 4 units.
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b. 5 units. c. 6 units. d. 7 units. ____ 12. Refer to Table 14-4. The firm will produce a quantity greater than 4 because at 4 units of output, marginal cost a. is less than marginal revenue. b. equals marginal revenue. c. is greater than marginal revenue. d. is minimized. ____ 13. Refer to Table 14-4. What is the firm’s profit-maximizing strategy? a.
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This note was uploaded on 12/02/2011 for the course ECON ECON200 taught by Professor Songhualin during the Fall '11 term at Maryland.

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ReviewCh14 - Chapater14 Multiple Choice Identify the choice...

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