First:’Multiple’choice’
!
1. In!the!case!of!perfect!competition:!
a) Producer!is!considered!as!price!maker.!
b) Market!price!is!decided!by!producer!decision!
c) Average!revenue!equals!marginal!revenue!
d) All!of!the!above!
2. In the case of non–perfect competition:
a) Total revenue is constant.
b) Total revenue is increasing at constant rate.
c) Total revenue is decreasing.
d) None of the above.
3.!If!the!MR!>MC,!producer!should:!
a) Increase!their!production!
b) Decrease!their!production!
c) Not!change!production!
d) None!of!the!above!
4.!If!the!quantity!demanded!for!gasoline!increased!by!10%!after!a!decrease!in!its!price!
by!20%,!this!means!that:!
a) Ed!<!|–1|!
b) Ed!=|–1|!
c) Ed!>|–1|!
d) ED!>!0!
5. Efficiency is achieved if:
a) MC = MR
b) MC = AR
c) MC = ATC
