Micro Ch 10 LearnSmart - Assignment Essays

question

Economists group industries into ____ distinct market structures

answer

four

question

Which of the following best describes pure competition?

answer

An industry involving a very large number of firms producing identical products and in which new firms can enter or exit the industry very easily.

question

True or false: A pure monopoly involves a very large number of firms producing a single unique product.

answer

False, a pure monopoly involves one firm or seller producing a single unique product.

question

In which market model do firms rely on product differentiation to distinguish themselves from the competition?

answer

monopolistic competition

question

_____ is relatively rare in the real world, although this market model is highly _____ to several industries.

answer

Pure competition; relevant

question

Which of the following are considered to be the four basic market structures?

answer

-Pure competition
-Monopolistic competition
-Oligopoly
-Pure monopoly

question

Which of the following are conditions necessary to have pure competition?

answer

-very large number of firms or sellers
-standardized product
-free entry and exit

question

Pure ______ involves a very large number of firms.

answer

competition

question

Which of the following features occur in a purely competitive market?

answer

-Many independently acting sellers
-Sales in both national and international markets.

question

Which of the following best describes a pure monopoly?

answer

One firm selling a single unique product, where entry of additional firms is blocked and there is considerable control over price

question

True or false: Firms within pure competition will produce standardized products.

answer

true

question

Which of the following is a characteristic of a monopolistically competitive market?

answer

A relatively large number of sellers producing differentiated products

question

A firm operating in a purely competitive market is a price taker because it ______.

answer

cannot change the market price, it can only adjust to it

question

_____ competition is considered to be rare in the real world.

answer

Pure or Perfect

question

A purely competitive firm is a price _____

answer

taker

question

Firms within pure competition are considered to be price _____

answer

takers

question

A basic feature of the purely competitive market is the presence of ______.

answer

a large number of sellers

question

In a perfectly competitive market, the demand curve for an individual firm is perfectly _____ at the market price

answer

elastic

question

Which of the following market structures produces only a standardized product?

answer

A purely competitive market

question

In a purely competitive market, price per unit to a buyer equals:

answer

average revenue to a seller

question

Which of the following best describes the situation of a price-taking firm?
A price-taking firm is one of a _____ number of firms producing a product that is identical to that of every other firm in the industry and providing _____ of total market supply.

answer

large; only a fraction

question

A firm's total revenue is calculated as _____ times quantity produced.

answer

price

question

Which of the following explains why a purely competitive firm is a price taker?

answer

A purely competitive firm offers only a negligible fraction of total market supply and therefore must accept the price determined by the market

question

The change in total revenue that results from selling one more unit of output is called _____ revenue.

answer

marginal

question

Which factors illustrate that the demand curve for a purely competitive firm is perfectly elastic?

answer

-The firm does not need to lower its price to increase its sales volume.
-The firm cannot obtain a higher price by restricting its output.

question

A(n) _____ competitive firm's average-revenue schedule is also known as its demand schedule.

answer

pure, perfectly, or purely

question

In a purely competitive market, price per unit to the purchaser is synonymous with _____ per unit or _____ revenue to a seller.

answer

revenue or cost ; average or marginal

question

In the short run, a purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting its _____

answer

output

question

The price, multiplied by the firm's output or goods produced, equals ______.

answer

total revenue

question

The two ways to determine the level of output at which a firm will realize maximum profit or minimum loss are to compare total revenue to ______ and to compare marginal revenue to ______.

answer

total cost; marginal cost

question

In pure competition, if the first unit of output sold increases total revenue from $0 to $131, marginal revenue for that unit is $131. If the second unit sold increases total revenue from $131 to $262, marginal revenue is again $131. The third unit sold increases total revenue to $______ and marginal revenue is now $______.

answer

393; 131

question

From an economic standpoint, the break-even point is the level of output at which a firm makes a(n) ______ profit.

answer

normal

question

Which of the following best describes marginal revenue?

answer

The revenue that an additional unit of output contributes to total revenue.

question

A purely competitive firm's demand schedule is equal to which of the following?

answer

-average revenue
-marginal revenue

question

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

answer

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

question

A purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting only its output because it ______.

answer

is a price taker

question

The MR = MC rule is known as the:

answer

profit-maximizing rule

question

What are two ways that a purely competitive firm can determine the level of output at which it will realize maximum profit or minimum losses?

answer

-By comparing total revenue to total costs
-By comparing marginal revenue to marginal costs

question

In pure competition, to calculate economic profit, we first calculate the difference between _____ and average total cost and then multiply it by output.

answer

price

question

Which of the following best describes the economic break-even point?

answer

The point where total revenue covers all costs, but there is no economic profit.

question

_____ revenue is the additional revenue that an additional unit of _____ would add to total revenue.

answer

maginal, output

question

A firm would not produce a unit of output where ______.

answer

marginal cost exceeds marginal revenue

question

The profit-maximizing rule of MR=MC states that in the short run, the firm will maximize profit or minimize loss by producing the output for which marginal revenue ______ marginal cost.

answer

equals

question

Which of the following is a method of calculating economic profit in pure competition?

answer

Price minus average total cost multiplied by quantity

question

True or false: Quantity supplied increases as price decreases, and economic profit is usually higher at lower product prices and output.

answer

false

question

If price is below a firm's minimum average _____ cost, the firm will not operate.

answer

variable

question

A firm should always stop producing if its average ______ cost is ______ price.

answer

variable; greater than

question

In a purely competitive industry, at the profit-maximizing or loss-minimizing level of output, marginal ______ is equal to ______.

answer

-cost; price
-revenue; price
-revenue; marginal cost

question

The quantity of a product supplied by a firm in pure competition should _____ as long as price rises.

answer

increase

question

What is the firm's most likely response if price is exactly equal to minimum average variable cost?

answer

Indifference to producing or shutting down

question

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

answer

-Technology
-Prices of variable inputs

question

Total revenue equals ______ times ______.

answer

Price , Quantity

question

Changes in _____ and changes in prices of variable inputs alter costs and shift the marginal cost or short run supply curve.

answer

technology

question

Multiplying product price by output reveals which of the following?

answer

Total revenue

1 of 54

question

Economists group industries into ____ distinct market structures

answer

four

question

Which of the following best describes pure competition?

answer

An industry involving a very large number of firms producing identical products and in which new firms can enter or exit the industry very easily.

question

True or false: A pure monopoly involves a very large number of firms producing a single unique product.

answer

False, a pure monopoly involves one firm or seller producing a single unique product.

question

In which market model do firms rely on product differentiation to distinguish themselves from the competition?

answer

monopolistic competition

question

_____ is relatively rare in the real world, although this market model is highly _____ to several industries.

answer

Pure competition; relevant

question

Which of the following are considered to be the four basic market structures?

answer

-Pure competition
-Monopolistic competition
-Oligopoly
-Pure monopoly

question

Which of the following are conditions necessary to have pure competition?

answer

-very large number of firms or sellers
-standardized product
-free entry and exit

question

Pure ______ involves a very large number of firms.

answer

competition

question

Which of the following features occur in a purely competitive market?

answer

-Many independently acting sellers
-Sales in both national and international markets.

question

Which of the following best describes a pure monopoly?

answer

One firm selling a single unique product, where entry of additional firms is blocked and there is considerable control over price

question

True or false: Firms within pure competition will produce standardized products.

answer

true

question

Which of the following is a characteristic of a monopolistically competitive market?

answer

A relatively large number of sellers producing differentiated products

question

A firm operating in a purely competitive market is a price taker because it ______.

answer

cannot change the market price, it can only adjust to it

question

_____ competition is considered to be rare in the real world.

answer

Pure or Perfect

question

A purely competitive firm is a price _____

answer

taker

question

Firms within pure competition are considered to be price _____

answer

takers

question

A basic feature of the purely competitive market is the presence of ______.

answer

a large number of sellers

question

In a perfectly competitive market, the demand curve for an individual firm is perfectly _____ at the market price

answer

elastic

question

Which of the following market structures produces only a standardized product?

answer

A purely competitive market

question

In a purely competitive market, price per unit to a buyer equals:

answer

average revenue to a seller

question

answer

large; only a fraction

question

A firm's total revenue is calculated as _____ times quantity produced.

answer

price

question

Which of the following explains why a purely competitive firm is a price taker?

answer

A purely competitive firm offers only a negligible fraction of total market supply and therefore must accept the price determined by the market

question

The change in total revenue that results from selling one more unit of output is called _____ revenue.

answer

marginal

question

Which factors illustrate that the demand curve for a purely competitive firm is perfectly elastic?

answer

-The firm does not need to lower its price to increase its sales volume.
-The firm cannot obtain a higher price by restricting its output.

question

A(n) _____ competitive firm's average-revenue schedule is also known as its demand schedule.

answer

pure, perfectly, or purely

question

In a purely competitive market, price per unit to the purchaser is synonymous with _____ per unit or _____ revenue to a seller.

answer

revenue or cost ; average or marginal

question

In the short run, a purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting its _____

answer

output

question

The price, multiplied by the firm's output or goods produced, equals ______.

answer

total revenue

question

The two ways to determine the level of output at which a firm will realize maximum profit or minimum loss are to compare total revenue to ______ and to compare marginal revenue to ______.

answer

total cost; marginal cost

question

answer

393; 131

question

From an economic standpoint, the break-even point is the level of output at which a firm makes a(n) ______ profit.

answer

normal

question

Which of the following best describes marginal revenue?

answer

The revenue that an additional unit of output contributes to total revenue.

question

A purely competitive firm's demand schedule is equal to which of the following?

answer

-average revenue
-marginal revenue

question

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

answer

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

question

A purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting only its output because it ______.

answer

is a price taker

question

The MR = MC rule is known as the:

answer

profit-maximizing rule

question

What are two ways that a purely competitive firm can determine the level of output at which it will realize maximum profit or minimum losses?

answer

-By comparing total revenue to total costs
-By comparing marginal revenue to marginal costs

question

In pure competition, to calculate economic profit, we first calculate the difference between _____ and average total cost and then multiply it by output.

answer

price

question

Which of the following best describes the economic break-even point?

answer

The point where total revenue covers all costs, but there is no economic profit.

question

_____ revenue is the additional revenue that an additional unit of _____ would add to total revenue.

answer

maginal, output

question

A firm would not produce a unit of output where ______.

answer

marginal cost exceeds marginal revenue

question

The profit-maximizing rule of MR=MC states that in the short run, the firm will maximize profit or minimize loss by producing the output for which marginal revenue ______ marginal cost.

answer

equals

question

Which of the following is a method of calculating economic profit in pure competition?

answer

Price minus average total cost multiplied by quantity

question

True or false: Quantity supplied increases as price decreases, and economic profit is usually higher at lower product prices and output.

answer

false

question

If price is below a firm's minimum average _____ cost, the firm will not operate.

answer

variable

question

A firm should always stop producing if its average ______ cost is ______ price.

answer

variable; greater than

question

In a purely competitive industry, at the profit-maximizing or loss-minimizing level of output, marginal ______ is equal to ______.

answer

-cost; price
-revenue; price
-revenue; marginal cost

question

The quantity of a product supplied by a firm in pure competition should _____ as long as price rises.

answer

increase

question

What is the firm's most likely response if price is exactly equal to minimum average variable cost?

answer

Indifference to producing or shutting down

question

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

answer

-Technology
-Prices of variable inputs

question

Total revenue equals ______ times ______.

answer

Price , Quantity

question

Changes in _____ and changes in prices of variable inputs alter costs and shift the marginal cost or short run supply curve.

answer

technology

question

Multiplying product price by output reveals which of the following?

answer

Total revenue

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