Econ 200 Final (Exam 3)
Refer to the graph above representing the purely competitive market for a product. Where the market is at equilibrium, the deadweight loss would be:
Zero
Refer to the diagram. At the profit-maximizing output, total revenue will be:
0AHE
Refer to the diagram. At the profit-maximizing output, total fixed cost is equal to:
BCFG
In the short run, the individual competitive firm's supply curve is that segment of the:
Marginal cost curve lying above the average variable cost curve.
Refer to the diagram. At the profit-maximizing output, the firm will realize:
an economic profit of ABGH
Refer to the graph for a purely competitive market for a product. Where the market is at equilibrium, the producer surplus would be represented by the area:
b
Refer to the diagram. If this competitive firm produces at Q, it will:
earn a normal profit
The primary force encouraging the entry of new firms into a purely competitive industry is:
economic profits earned by firms already in the industry.
If a purely competitive firm shuts down in the short run:
it will realize a loss equal to its total fixed cost
A competitive firm in the short run can determine the profit maximizing (or loss minimizing) output by equating:
marginal revenue and marginal cost
Refer to the diagram for a purely competitive producer. The firm will produce at a loss a all prices:
between p2 and p3
The demand schedule or curve confronted by the individual, purely competitive firm is:
perfectly elastic
Suppose that the corn market is purely competitive. If the corn farmers are currently earning negative economic profits, then we would expect that in the long run the market's:
supply curve will shift to the left
Refer to the diagram for a purely competitive producer. The firm's short run supply curve is:
the bcd segment and above on the MC curve
The diagram portrays:
the equilibrium position of a competitive firm in the long run.
In a purely competitive industry:
there may be economic profits in the short run but not in the long run.
The MR=MC rule implies
to firms in all types of industries
If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:
will also be $5
Refer to the diagram. At the profit-maximizing output, total variable cost is equal to:
0CFE
Refer to the graphs above for a purely competitive market in the short run. The graphs suggest that in the long run, assuming no changes in the given information:
New firms will be attracted into the industry
In the short run, a purely competitive firm will always make an economic profit if:
P>ATC
If a firm is confronted with economic losses in the short run, it will decide whether or not to produce by comparing:
Price and minimum average variable cost
Refer to the graphs above for a purely competitive market in the short run. The graphs suggest that as long run adjustments consequently occur, the firms in the industry will find that:
Profits will decrease
Refer to the above graphs for a competitive market in the short run. What will happen to the firm's economic profits as long run market adjustments occur?
Profits will increase to zero
refer to the above graphs for a competitive market in the short run. What will happen in the long run to industry supply and the equilibrium price P of the product?
S will decrease, P will increase
Refer to the graphs above for a purely competitive market in the short run. The graphs suggest that in the long run, as automatic market adjustments occur, the demand curve facing the individual firm will:
Shift down
Refer to the graphs above for a purely competitive market in the short run. The graphs suggest that in the long run, assuming no changes in the given information, the market:
Supply curve will shift to the right
Refer to the above graphs for a competitive market in the short run. Which of the following statements are true?
The firm is experiencing economic losses.
Refer to the graph above representing the purely competitive market for a product. Where the market is at equilibrium, the consumer surplus would be represented by the area:
a
A purely competitive seller is
a "price taker"
A perfectly elastic demand curve implies that the firm:
can sell as much output as it chooses at the existing price
Refer to the diagram. To maximize profits or minimize losses, this firm will produce:
E units at price A
Refer to the diagram for a purely competitive producer. If product price is P3:
Economic profits will be zero
Resources are efficiently allocated when production occurs at that output at which:
P equals MC
Refer to the diagram for a purely competitive producer. The lowest price at which the firm should produce (as opposed to shutting down) is:
P2