McGraw Hill - Assignment Essays

question

Multiplying

answer

In perfect competition, a firm's total revenue can be calculated by ________ the product price and the quantity demanded.

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it cannot obtain a higher price by restricting its output, nor does it need to lower its price to increase its sales volume

answer

The demand curve for a perfectly competitive firm is perfectly horizontal because:

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production

answer

The selection of the short-run rate of output (with existing plant and equipment) is the _______ decision.

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price

answer

Within perfect competition, an individual firm would not be able to affect ______ and is therefore known as a price-taker, yet a market as a whole can affect price by changing market output.

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output

answer

A perfectly competitive firm can maximize its economic profit (or minimize its loss) only by adjusting its

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$300

answer

If a perfectly competitive firm sells 100 units and the market price is $3, total revenue for this firm is equal to

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price

answer

A firm's total revenue is calculated as _____________ multiplied by quantity sold.

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total revenue minus total cost

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In perfect competition, a firm's economic profit is equal to:

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Lower prices reduce revenue since the output could all be sold at the current price.
Higher prices make customers buy from a competitor.
One firm in a competitive industry is so small that it cannot change market equilibrium.

answer

Which of the following are features of the demand curve facing a perfectly competitive firm?

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output

answer

The selection of the short-run rate of _______ (with existing plant and equipment) is the production decision.

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increases

answer

As output increases, total cost

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False

answer

True or false: A firm within perfect competition will maximize its profit when total cost is maximized over total revenue.

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$300

answer

If a perfectly competitive firm sells 50 units and the market price is $6, total revenue for this firm is equal to

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difference between

answer

In perfect competition, a firm's economic profit is the _______ total revenues and total costs.

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price

answer

In a perfectly competitive market, the market price is the same as the firm's

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upward; right

answer

A perfectly competitive firm's total revenue (TR) curve will slope ____ and to the _____.

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maximized above

answer

A perfectly competitive firm will maximize its profit by producing the quantity where total revenue is _______ total cost.

question

answer

For a perfectly competitive fish producer, if the market price is $10 per fish, how much will the individual fish producer bring in per fish? $__________

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the same as

answer

In a perfectly competitive market, the price received by the firm is _______ market price.

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marginal

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The increase in total costs associated with a one-unit increase in production is ____________ cost.

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more resources

answer

Total cost increases with output because more production requires

question

answer

For a perfectly competitive t-shirt producer, if the market price is $20 per t-shirt, how much will the individual t-shirt firm bring in per t-shirt? $_________

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marginal; rise

answer

Because of the law of diminishing returns, ______ cost eventually ______ as more units of output are produced.

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maximized

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A perfectly competitive firm's profit is ______ when total revenue exceeds total cost by the greatest amount.

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price

answer

A perfectly competitive firm should produce the amount of output where marginal cost equals _______.

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the vertical distance between the total revenue and total cost curves is the greatest

answer

A perfectly competitive firm will maximize its profits by producing up to the point where

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a perfectly competitive firm is profit maximizing

a perfectly competitive firm should expand output to profit maximize

a perfectly competitive firm should reduce output to profit maximize

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Produce where P = MC

Produce where P > MC

Produce where P < MC

question

answer

Using the graph showing MC, if the market price is $13, the firm profit maximizes when they produce _____ baskets of fish.

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increase output to maximize profits.

answer

If price exceeds marginal cost, a perfectly competitive firm should

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Higher

answer

A firm should not produce a unit of output when the marginal cost is ___________ than its price.

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marginal cost

answer

A perfectly competitive firm should produce the amount of output where price equals _______.

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Producing it would add more to costs than to revenue, and profit would decline

answer

Which of the following explains why a firm would not produce a unit of output where MC exceeds P?

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marginal cost is equal to price.

answer

A firm within a perfectly competitive market can maximize its profit in the short run by producing up to the point where

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in the short run, the firm will maximize profit or minimize loss by producing the output at which price equals marginal cost.

answer

The profit-maximizing rule of P=MC states that:

question

increase

answer

Within perfect competition, a firm will ______ output as price rises, as long as marginal cost is less than price.

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$1000

answer

At a profit-maximizing level of output of 500 units, a perfectly competitive firm's price is $5 and average total cost is $3. This firm's economic profit equals:

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Not produce that additional unit of output

answer

When the marginal cost of an additional unit of output exceeds the price, the firm should?

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profit per unit multiplied by quantity

answer

In perfect competition, a firm's economic profit is equal to:

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it will experience the highest possible profits at this point

answer

A firm within perfect competition will produce up to the point where price equals marginal cost because

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$100

answer

At a profit-maximizing level of output of 100 units, a perfectly competitive firm's price is $4 and average total cost is $3. This firm's economic profit equals:

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average

answer

When price is above ______ total cost, the firm incurs an economic profit.

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higher

answer

A firm should not produce a unit of output when the marginal cost is than its price.

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price = marginal cost

answer

For a perfectly competitive firm, total profits are maximized where

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Price

answer

In perfect competition, a firm's total profit is equal to its product ___________ minus average total cost multiplied by output.

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marginal cost

answer

Which curve is a perfectly competitive firm's short-run supply curve?

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marginal cost is equal to price.

answer

A firm within a perfectly competitive market can maximize its profit in the short run by producing up the point where

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price

answer

For a perfectly competitive firm, total profits are maximized where marginal costs are equal to ___________ (one word).

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profit per unit multiplied by quantity

answer

In perfect competition, a firm's economic profit is equal to:

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supply

answer

The marginal cost curve is the short-run ___________ curve for a competitive firm.

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it will experience the highest possible profits at this point

answer

A firm within perfect competition will produce up to the point where price equals marginal cost because

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above

answer

When price is _______ average total cost, the firm incurs an economic profit.

question

Prices of factor inputs
Technology

answer

Which of the following factors will alter costs and shift the marginal cost (or short-run supply curve) to a new location?

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supply

answer

The marginal cost curve is the short-run ______ curve for a competitive firm.

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in the short run, the firm will maximize profit or minimize loss by producing the output at which price equals marginal cost.

answer

The profit-maximizing rule of P=MC states that:

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below

answer

When price is _______ average total cost, the firm incurs an economic loss.

question

Technology
Expectations
The price of factor inputs

answer

The factors that will shift supply (i.e., the determinants of a firm's supply) include

question

Improvements in technology
Firm expectations

answer

Which of the following factors will alter costs and shift the marginal cost (or short-run supply curve) to a new location?

question

increase; to the left

answer

A wage ______ would raise marginal cost and shift the supply curve _______.

question

market

answer

The sum of all firm's marginal cost curves is the __________ supply curve.

question

supply

answer

The market ___________ schedule shows the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.

question

Demand
Tastes and preferences

answer

The factors that will shift supply (i.e., the determinants of a firm's supply) do not include

question

to the left

answer

A wage increase would increase marginal costs and shift the supply curve:

question

market

answer

The sum of the marginal cost curves of all the firms is the ______ supply curve.

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summation

answer

The market supply curve is the horizontal ______ of all the individual supply curves for a good or service.

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enter

answer

When economic profits exist, this causes competing firms to __________ the market.

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enter; fall

answer

When firms _______ the market, supply increases causing price to _______.

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may; zero

answer

A competitive firm _______ earn economic profit in the short run but will earn _______ economic profit in the long run.

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price

answer

Competition, reflected in the entry and exit of firms, eliminates economic profits and losses by adjusting the product ______ to equal the minimum average total cost.

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True

answer

True or false: When economic losses exist, this causes firms to exit.

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increases; fall

answer

When firms enter the market, supply _______ causing price to _______.

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decreases; rise

answer

When firms exit the market, supply _______ causing price to _______.

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Zero

answer

In the long run, a perfectly competitive firm will earn ______ economic profit.

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average total cost

answer

Competition forces firms to produce at output levels at which ______ is minimized.

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Economic profits

answer

_______ in a competitive industry will attract new firms into the industry.

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eliminated; average total cost

answer

In long-run competitive market equilibrium, economic profit is _______ and price is equal to the minimum of _______.

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Economic losses

answer

_______ in a competitive industry will cause firms to exit the industry.

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less than; losses

answer

Which of the following will cause new firms to exit an industry?

If market price is _______ minimum average total costs, the resulting _______ will cause firms to exit the industry.

question

Economic profit is eliminated.
Price equals minimum average total cost.

answer

Which of the following are true in long-run competitive market equilibrium?

question

industry expansion that increases supply

answer

If price is initially greater than average total cost, resulting profits will cause firms to enter the industry eventually resulting in:

question

economic losses

answer

Economists maintain that firms will exit an industry due to:

question

greater than; profits

answer

Which of the following will cause new firms to enter an industry?

If market price is _______ minimum average total costs, the resulting _______ will attract new firms to the industry.

question

industry contraction that decreases market supply

answer

If price is initially less than average total cost, resulting losses will cause firms to leave the industry eventually resulting in:

question

enter and exit

answer

In perfectly competitive markets, firms can freely:

question

Low barriers to entry
Zero economic profits in the long run
Identical products

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

less; fewer

answer

Losses in a particular industry indicate that consumers want _______ of that industry's output. They get that desired output when _______ firms are in the industry.

question

competitive process

answer

The ________ creates strong pressures for firms to pursue product and technological innovation.

question

firms will enter the industry

answer

In a competitive market if the current market price is high and firms are earning economic profit:

question

There are no significant legal, technological, financial or other obstacles prohibiting firms from entry and exit.

answer

Which of the following summarizes why it is possible for a firm to freely enter and exit a perfectly competitive market?

question

Horizontal firm demand curve
Many firms
Firms expand production until P = MC

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

more; more

answer

High profits in a particular industry indicate that consumers want _______ of that industry's output. They get that desired output when _______ firms are in the industry.

question

product and technological innovation

answer

The competitive process creates strong pressures for firms to pursue _______

question

low barriers to entry

answer

Firms in competitive markets face ______.

question

Zero economic profits in the long run
Identical products
Horizontal firm demand curve

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

economic losses

answer

Which of the following is definitely a signal to producers that they are not using resources in the best way?

question

loss

answer

Economic _________ are a signal to producers that they are not using society's scarce resources in the best way. Under certain circumstances these producers should consider shutting down production and exiting the industry.

1 of 95

question

Multiplying

answer

In perfect competition, a firm's total revenue can be calculated by ________ the product price and the quantity demanded.

question

it cannot obtain a higher price by restricting its output, nor does it need to lower its price to increase its sales volume

answer

The demand curve for a perfectly competitive firm is perfectly horizontal because:

question

production

answer

The selection of the short-run rate of output (with existing plant and equipment) is the _______ decision.

question

price

answer

Within perfect competition, an individual firm would not be able to affect ______ and is therefore known as a price-taker, yet a market as a whole can affect price by changing market output.

question

output

answer

A perfectly competitive firm can maximize its economic profit (or minimize its loss) only by adjusting its

question

$300

answer

If a perfectly competitive firm sells 100 units and the market price is $3, total revenue for this firm is equal to

question

price

answer

A firm's total revenue is calculated as _____________ multiplied by quantity sold.

question

total revenue minus total cost

answer

In perfect competition, a firm's economic profit is equal to:

question

answer

Which of the following are features of the demand curve facing a perfectly competitive firm?

question

output

answer

The selection of the short-run rate of _______ (with existing plant and equipment) is the production decision.

question

increases

answer

As output increases, total cost

question

False

answer

True or false: A firm within perfect competition will maximize its profit when total cost is maximized over total revenue.

question

$300

answer

If a perfectly competitive firm sells 50 units and the market price is $6, total revenue for this firm is equal to

question

difference between

answer

In perfect competition, a firm's economic profit is the _______ total revenues and total costs.

question

price

answer

In a perfectly competitive market, the market price is the same as the firm's

question

upward; right

answer

A perfectly competitive firm's total revenue (TR) curve will slope ____ and to the _____.

question

maximized above

answer

A perfectly competitive firm will maximize its profit by producing the quantity where total revenue is _______ total cost.

question

answer

For a perfectly competitive fish producer, if the market price is $10 per fish, how much will the individual fish producer bring in per fish? $__________

question

the same as

answer

In a perfectly competitive market, the price received by the firm is _______ market price.

question

marginal

answer

The increase in total costs associated with a one-unit increase in production is ____________ cost.

question

more resources

answer

Total cost increases with output because more production requires

question

answer

For a perfectly competitive t-shirt producer, if the market price is $20 per t-shirt, how much will the individual t-shirt firm bring in per t-shirt? $_________

question

marginal; rise

answer

Because of the law of diminishing returns, ______ cost eventually ______ as more units of output are produced.

question

maximized

answer

A perfectly competitive firm's profit is ______ when total revenue exceeds total cost by the greatest amount.

question

price

answer

A perfectly competitive firm should produce the amount of output where marginal cost equals _______.

question

the vertical distance between the total revenue and total cost curves is the greatest

answer

A perfectly competitive firm will maximize its profits by producing up to the point where

question

a perfectly competitive firm is profit maximizing

a perfectly competitive firm should expand output to profit maximize

a perfectly competitive firm should reduce output to profit maximize

answer

Produce where P = MC

Produce where P > MC

Produce where P < MC

question

answer

Using the graph showing MC, if the market price is $13, the firm profit maximizes when they produce _____ baskets of fish.

question

increase output to maximize profits.

answer

If price exceeds marginal cost, a perfectly competitive firm should

question

Higher

answer

A firm should not produce a unit of output when the marginal cost is ___________ than its price.

question

marginal cost

answer

A perfectly competitive firm should produce the amount of output where price equals _______.

question

Producing it would add more to costs than to revenue, and profit would decline

answer

Which of the following explains why a firm would not produce a unit of output where MC exceeds P?

question

marginal cost is equal to price.

answer

A firm within a perfectly competitive market can maximize its profit in the short run by producing up to the point where

question

in the short run, the firm will maximize profit or minimize loss by producing the output at which price equals marginal cost.

answer

The profit-maximizing rule of P=MC states that:

question

increase

answer

Within perfect competition, a firm will ______ output as price rises, as long as marginal cost is less than price.

question

$1000

answer

At a profit-maximizing level of output of 500 units, a perfectly competitive firm's price is $5 and average total cost is $3. This firm's economic profit equals:

question

Not produce that additional unit of output

answer

When the marginal cost of an additional unit of output exceeds the price, the firm should?

question

profit per unit multiplied by quantity

answer

In perfect competition, a firm's economic profit is equal to:

question

it will experience the highest possible profits at this point

answer

A firm within perfect competition will produce up to the point where price equals marginal cost because

question

$100

answer

At a profit-maximizing level of output of 100 units, a perfectly competitive firm's price is $4 and average total cost is $3. This firm's economic profit equals:

question

average

answer

When price is above ______ total cost, the firm incurs an economic profit.

question

higher

answer

A firm should not produce a unit of output when the marginal cost is than its price.

question

price = marginal cost

answer

For a perfectly competitive firm, total profits are maximized where

question

Price

answer

In perfect competition, a firm's total profit is equal to its product ___________ minus average total cost multiplied by output.

question

marginal cost

answer

Which curve is a perfectly competitive firm's short-run supply curve?

question

marginal cost is equal to price.

answer

A firm within a perfectly competitive market can maximize its profit in the short run by producing up the point where

question

price

answer

For a perfectly competitive firm, total profits are maximized where marginal costs are equal to ___________ (one word).

question

profit per unit multiplied by quantity

answer

In perfect competition, a firm's economic profit is equal to:

question

supply

answer

The marginal cost curve is the short-run ___________ curve for a competitive firm.

question

it will experience the highest possible profits at this point

answer

A firm within perfect competition will produce up to the point where price equals marginal cost because

question

above

answer

When price is _______ average total cost, the firm incurs an economic profit.

question

Prices of factor inputs
Technology

answer

Which of the following factors will alter costs and shift the marginal cost (or short-run supply curve) to a new location?

question

supply

answer

The marginal cost curve is the short-run ______ curve for a competitive firm.

question

in the short run, the firm will maximize profit or minimize loss by producing the output at which price equals marginal cost.

answer

The profit-maximizing rule of P=MC states that:

question

below

answer

When price is _______ average total cost, the firm incurs an economic loss.

question

Technology
Expectations
The price of factor inputs

answer

The factors that will shift supply (i.e., the determinants of a firm's supply) include

question

Improvements in technology
Firm expectations

answer

Which of the following factors will alter costs and shift the marginal cost (or short-run supply curve) to a new location?

question

increase; to the left

answer

A wage ______ would raise marginal cost and shift the supply curve _______.

question

market

answer

The sum of all firm's marginal cost curves is the __________ supply curve.

question

supply

answer

The market ___________ schedule shows the various amounts of a product that producers are willing and able to make available for sale at each possible price during a specific period.

question

Demand
Tastes and preferences

answer

The factors that will shift supply (i.e., the determinants of a firm's supply) do not include

question

to the left

answer

A wage increase would increase marginal costs and shift the supply curve:

question

market

answer

The sum of the marginal cost curves of all the firms is the ______ supply curve.

question

summation

answer

The market supply curve is the horizontal ______ of all the individual supply curves for a good or service.

question

enter

answer

When economic profits exist, this causes competing firms to __________ the market.

question

enter; fall

answer

When firms _______ the market, supply increases causing price to _______.

question

may; zero

answer

A competitive firm _______ earn economic profit in the short run but will earn _______ economic profit in the long run.

question

price

answer

Competition, reflected in the entry and exit of firms, eliminates economic profits and losses by adjusting the product ______ to equal the minimum average total cost.

question

True

answer

True or false: When economic losses exist, this causes firms to exit.

question

increases; fall

answer

When firms enter the market, supply _______ causing price to _______.

question

decreases; rise

answer

When firms exit the market, supply _______ causing price to _______.

question

Zero

answer

In the long run, a perfectly competitive firm will earn ______ economic profit.

question

average total cost

answer

Competition forces firms to produce at output levels at which ______ is minimized.

question

Economic profits

answer

_______ in a competitive industry will attract new firms into the industry.

question

eliminated; average total cost

answer

In long-run competitive market equilibrium, economic profit is _______ and price is equal to the minimum of _______.

question

Economic losses

answer

_______ in a competitive industry will cause firms to exit the industry.

question

less than; losses

answer

Which of the following will cause new firms to exit an industry?

If market price is _______ minimum average total costs, the resulting _______ will cause firms to exit the industry.

question

Economic profit is eliminated.
Price equals minimum average total cost.

answer

Which of the following are true in long-run competitive market equilibrium?

question

industry expansion that increases supply

answer

If price is initially greater than average total cost, resulting profits will cause firms to enter the industry eventually resulting in:

question

economic losses

answer

Economists maintain that firms will exit an industry due to:

question

greater than; profits

answer

Which of the following will cause new firms to enter an industry?

If market price is _______ minimum average total costs, the resulting _______ will attract new firms to the industry.

question

industry contraction that decreases market supply

answer

If price is initially less than average total cost, resulting losses will cause firms to leave the industry eventually resulting in:

question

enter and exit

answer

In perfectly competitive markets, firms can freely:

question

Low barriers to entry
Zero economic profits in the long run
Identical products

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

less; fewer

answer

Losses in a particular industry indicate that consumers want _______ of that industry's output. They get that desired output when _______ firms are in the industry.

question

competitive process

answer

The ________ creates strong pressures for firms to pursue product and technological innovation.

question

firms will enter the industry

answer

In a competitive market if the current market price is high and firms are earning economic profit:

question

There are no significant legal, technological, financial or other obstacles prohibiting firms from entry and exit.

answer

Which of the following summarizes why it is possible for a firm to freely enter and exit a perfectly competitive market?

question

Horizontal firm demand curve
Many firms
Firms expand production until P = MC

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

more; more

answer

High profits in a particular industry indicate that consumers want _______ of that industry's output. They get that desired output when _______ firms are in the industry.

question

product and technological innovation

answer

The competitive process creates strong pressures for firms to pursue _______

question

low barriers to entry

answer

Firms in competitive markets face ______.

question

Zero economic profits in the long run
Identical products
Horizontal firm demand curve

answer

Which of the following are characteristics of the perfectly competitive market structure?

question

economic losses

answer

Which of the following is definitely a signal to producers that they are not using resources in the best way?

question

loss

answer

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