72. In a perfectly competitive market where firms are currently experiencing economic profits in the short-run, which
of the following is least likely to occur during the long-run?
73. Which characteristic of competitive markets permits society to answer the WHAT to produce question
efficiently?
74. When firms in a competitive market are experiencing zero economic profits, this is an indication
that A. They should be producing a different product.
75. When a firm is earning positive economic profits, this is an indication that the firm
76. Economic losses are a signal to producers
A. That they are using resources in the most efficient way.
77. Marginal cost pricing means that a firm
A. Produces up to the output where P = MC for a given market price.
78. A perfectly competitive market results in efficiency because
A. Price is driven down to minimum ATC.
79. The price signal the consumer gets in a competitive
market A. In no way reflects opportunity cost.
80. Marginal cost pricing results in the most desirable mix of goods and services from the consumer’s
standpoint because
81. Marginal cost pricing in competitive markets results in all but which one of the following?
A. An efficient mix of goods and services being produced.
82. In a perfectly competitive market economy, business failures can benefit society by causing
83. High profits in a particular industry indicate that
A. Consumers want less of that industry’s goods.
Topic: THE COMPETITIVE PROCESS
84. Bib’s Soccer Ball Company produces 800 soccer balls per week. If the firm used marginal cost pricing to
determine soccer ball output, it would produce 600 soccer balls. Consumers do not receive the most desirable
quantity of soccer balls from Bib’s because
A. Economic losses are occurring.
85. When economic losses exist in the cereal market, for example, this is an indication that
86. When economic profits exist in the market for a particular product, this is a signal to producers that
A. Consumers would like more scarce resources devoted to the production of this product.
87. The equilibrium price of a good or service in a competitive market is
88. When an athletic shoe company is producing a level of output at which price is greater than MC, from society’s
standpoint the company is producing too
89. When a computer firm is producing a level of output at which MC is greater than price, from society’s standpoint
the firm is producing too
90. In a perfectly competitive industry, economic profit
A. Can persist in the long run because of barriers to entry.
91.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: In Figure 23.3, at a price of p3 in the long run
92.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: In Figure 23.3, at a price of p2 in the long run
93.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: In Figure 23.3, if market demand is at D1, the firm should
94.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: In the long run, at prices below p2 in Figure 23.3,
95.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: In Figure 23.3, the price at which a firm makes zero economic profits is
96.
In Figure 23.3, diagram “a” presents the cost curves that are relevant to a firm’s production decision, and
diagram “b” shows the market demand and supply curves for the market. Use both diagrams to answer the
following question: If the market demand curve is D2 in Figure 23.3, then in the long run,
97.
Refer to Figure 23.4 for a perfectly competitive market and firm. Which of the following is likely to occur in
the market in the long run, ceteris paribus?
98.
Refer to Figure 23.4 for a perfectly competitive market and firm. Which of the following is most likely to
occur, ceteris paribus?
99.
If the firm in Figure 23.4 raised the price of its product above $4, the firm would
100.
Refer to Figure 23.4. In the long run, which of the following would not be expected?
101.
Refer to Figure 23.5 for a perfectly competitive firm. This firm will maximize profits by producing the level of
output that corresponds to point
102.
Refer to Figure 23.5 for a perfectly competitive firm. If this firm produces the level of output corresponding to
point B in the short run, it will earn