Chapter 9 Study Guide: Microeconomics

For a perfectly competitive market, long-run is characterized by all of the following but which one?

Which characteristic of competitive markets permits society to answer the WHAT to produce question efficiently?

For a competitive market in the long run,

Which of the following is an investment decision in a competitive market

Which of the following is not a barrier to entry?
- Government regulation
-Homogeneous products
- Control of essential factors of production
-Economies of scale

If catfish farmers expect catfish prices to fall in the future, then right now

The exit of firms from a marker, ceteris paribus

If a firm finds that its marginal cost is greater than its price

Which of the following is a consequence of competition?
-Positive economic profit in the long run
- An unrelenting squeeze on prices and profit
-Elimination of the most efficient firms
-Price-gouging behavior

The exit of firms from a market, ceteris paribus,
-Shifts the marker supply curve to the right
-Increases the equilibrium output in the market
-Reduces the economic losses of remaining firms in the market
-Shifts the market demand curve to the left

If a new sushi restaurant opens, then

One World View article is titled "Competition Shrinks India's Phone Bills." Competitive forces typically force companies to

If economic profits are earned in a competitive market, then over time

If price is above the long-run competitive equilibrium level,

The behavior expected in a competitive market includes

In a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long-run equilibrium, ceteris paribus?

When a firm is earning positive economic profits, this is an indication that the firm

Profit per unit is maximized when the firm produces the output where

In a perfectly competitive market economy, business failures can benefit society by causing

Which of the following is not a barrier to entry?
-Well-established brand loyalty
-Parents
-Control of distribution outlets
-Perfect information

In a perfectly competitive market, when price is equal to the

Marginal cost is the increase in total cost associated with a one-unit

When firms in a competitive market are experiencing zero economic profits, this is an indication that

Marginal cost pricing results in the most desirable mix of goods and services from the consumer's standpoint because

High profits in a particular industry indicate that

T or F: Patents are a barrier to entry

T or F: Technological improvements shift the average total cost curve and the marginal cost curve downward

T or F: In perfectly competitive markets, economic losses are the signal for firms to exit from the industry

T or F: Sellers in a perfectly competitive market are powerless to affect the market price of their product

T or F: Minimizing average total cost always lead to the maximization of total profit