Principles of Econ - PREPARE Ch. 9 Questions

​Long-run equilibrium in perfect competition results in A. allocative efficiency. B. productive efficiency. C. Both A and B. D. Neither A nor B.

C. Both A and B.

Which of the following terms best describes a state of the economy in which production reflects consumer​ preferences? A. consumer equilibrium B. socialism C. allocative efficiency D. productive efficiency

C. allocative efficiency

In a perfectly competitive industry with constant​ costs, the​ long-run supply curve will be A. upward sloping. B. downward sloping. C. horizontal. D. vertical.

C. horizontal.

The increase in total revenue that results from selling one more unit of output is A. marginal cost. B. average revenue. C. marginal revenue. D. None of the above.

C. marginal revenue.

In perfect​ competition, long-run equilibrium occurs when the economic profit is A. negative. B. positive. C. zero. D. None of the above.

C. zero.

In a perfectly competitive industry with increasing average​ costs, the​ long-run supply curve will be A. upward sloping. B. vertical. C. horizontal. D. downward sloping.

A. upward sloping.

If the market demand curve shifts to the​ right, how will a competitive​ firm's level of output​ change? A. The firm will keep its output​ constant, but its profits will increase. B. The firm will increase its​ output, and its profits will increase. C. The firm will need to decrease its output and therefore suffer losses. D. The firm will decrease its​ output, which will increase its profit.

B. The firm will increase its​ output, and its profits will increase.

Which of the following terms best describes the result of the forces of competition driving the market price to the minimum average cost of the typical​ firm? A. ​decreasing-cost industry B. competitive markdown C. productive efficiency D. allocative efficiency

C. productive efficiency

A perfectly competitive firm is losing money in the short​ run, and its price is less than its average variable cost. In order to minimize its losses in the short​ run, this firm should A. continue producing its current level of output. B. increase its level of output. C. shut down. D. do none of the above.

C. shut down.

What is the relationship between​ price, average​ revenue, and marginal revenue for a firm in a perfectly competitive​ market? A. ​Price, average​ revenue, and marginal revenue usually all have different values. B. Price is equal to average revenue and greater than marginal revenue. C. Price is greater than average revenue and equal to marginal revenue. D. Price is equal to both average revenue and marginal revenue.

D. Price is equal to both average revenue and marginal revenue.

A buyer or seller that is unable to affect the market price is called A. a monopoly. B. an independent producer. C. a price maker. D. a price taker.

D. a price taker.