ch12 perfect competition testbank

ch12 perfect competition testbank - C h a p t e r 11 4 A B...

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369 11 PERFECT COMPETITION ± Competition Topic: Perfect Competition Skill: Recognition 1) Perfect competition is an industry with A) a few firms producing identical goods. B) a few firms producing goods that differ some- what in quality. C) many firms producing identical goods. D) many firms producing goods that differ some- what. Answer: C Topic: Perfect Competition Skill: Recognition 2) In a perfectly competitive industry, there are A) many buyers and many sellers. B) many buyers, but there might be only one or two sellers. C) many sellers, but there might be only one or two buyers. D) one firm that sets the price for the others to fol- low. Answer: A Topic: Perfect Competition Skill: Analytical 3) In perfect competition, the product of a single firm A) has many perfect substitutes produced by other firms. B) has many perfect complements produced by other firms. C) is sold under many differing brand names. D) is sold to different customers at different prices. Answer: A Topic: Perfect Competition Skill: Recognition 4) In perfect competition, restrictions on entry into an industry A) apply to both capital and labor. B) apply to labor but not to capital. C) apply to capital but not to labor. D) do not exist. Answer: D Topic: Price Takers Skill: Recognition 5) In perfect competition, A) each firm can influence the price of the good. B) there are few buyers. C) there are significant restrictions on entry. D) all firms in the market sell their product at the same price. Answer: D Topic: Price Takers Skill: Conceptual 6) The price elasticity of demand for any particular perfectly competitive firm’s output is A) less than 1. B) 1. C) equal to zero. D) infinite. Answer: D Topic: Price Takers Skill: Analytical 7) The demand for wheat from farm A is perfectly elastic because wheat from farm A is A) a perfect complement for wheat from farm B. B) a normal good. C) a perfect substitute for wheat from farm B. D) an inferior good. Answer: C Chapter
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370 CHAPTER 11 Topic: Price Takers Skill: Conceptual 8) In perfect competition, the elasticity of demand for the product of a single firm is A) 0. B) between 0 and 1. C) 1. D) infinite. Answer: D Topic: Price Takers Skill: Conceptual 9) In perfect competition, the elasticity of demand for the product of a single firm is A) zero, because the firm produces a unique prod- uct. B) zero, because many other firms produce identi- cal products. C) infinite, because the firm produces a unique product. D) infinite, because many other firms produce iden- tical products. Answer: D Topic: Price Takers Skill: Recognition 10) In perfect competition, an individual firm A) faces unitary elasticity of demand. B) has a price elasticity of supply equal to one. C) faces a perfectly elastic demand. D) has perfectly elastic supply. Answer: C Topic: Market Demand/Firm Demand Skill: Conceptual 11) If Steve’s Apple Orchard, Inc. is a perfectly com- petitive firm, the demand for Steve’s apples has A) zero elasticity.
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This note was uploaded on 03/11/2012 for the course ECON 104 taught by Professor Ismailov during the Spring '11 term at London College of Accountancy.

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ch12 perfect competition testbank - C h a p t e r 11 4 A B...

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