Econ 2420 Principles of Microeconomics, Spring 2011 Problem Set CH 11 1) Which of the following arguments was used in the textbook as evidence that the market for organically grown apples is perfectly competitive? A) The U.S. Department of Agriculture has established standards for the labeling of organic apples. B) In 1997, organically grown applies sold for a price 50 percent higher than the price of regular apples. C) Between 1997 and 2001, many apple farmers switched to growing organically grown apples. The increased supply forced down prices and made growing organically grown apples no more profitable than growing other apples. D) As organically grown apples became more popular with consumers in the 1990s, apple farmers in the Yakima Valley of Washington State began to grow more organically grown apples because the absence of insects there made it an ideal location. 2) Firms in perfectly competitive industries are unable to control the prices of the products they sell and earn a profit in the long run. Which of the following is one reason for this? 3) A perfectly competitive firm faces a demand curve that is 4) Which of the following is notan assumption of perfectly competitive markets? 5) In a perfectly competitive market the term "price taker" applies to A) sellers and buyers. B) firms but not buyers.
C) buyers but not sellers. D) only the smallest sellers and buyers.
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