江西财经大学微观经济学试题库chapter12.docx

Microeconomics 9e (Parkin)Chapter 12 Perfect Competition1 What is Perfect Competition?1) Perfect competition arises if the efficient scale of a single producer isrelative to the demand for the good or service.A) minimum; smallB) minimum; largeC) maximum; smallD) maximum; largeAnswer: ATopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking2) Which of the following is true regarding a perfectly competitive firm?A) The firm can charge a lower price than its competitors and thereby sell more output and increase its profits.B) The firm always earns a normal profit.C) The Erm's marginal revenue continually decreases.D) The firm's minimum efficient scale is small relative to the market demand.Answer: DTopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking3) The smallest quantity of output at which long-run average cost is at a minimum is a firm'sA) maximum efficient scaleB) profit-maximizing output pointC) minimum efficient scaleD) efficient output pointAnswer: CTopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking4) If the minimum efficient scale of a firm is small relative to the demand for the good, thenA) many small firms can compete in the market.B) several large firms will enter the market thereby reducing competition.C) there will be no economic profits for any small firms, so no new firms will ever enter the market.D) the firms already in the market have lower average total cost than any new firm entering the market.Answer: ATopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking5) In perfect competition, theA) market demand for the good or service is large relative to the minimum efficient scale of a single producer.B) market demand for the good or service is small relative to the minimum efficient scale of a single producer.C) market demand for the good or service can be small relative to the minimum efficient scale of a single producer as long as the goods or services are not identical.D) size of the market demand for the good or service relative to the minimum efficient scale of a single producer does not affect competition.Answer: ATopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking6) Which of the following conditions is consistent with perfect competition?A) Attempts by each firm to make their product different from products produced by other firms reinforces competition between firms.B) The minimum efficient scale of a single producer is small relative to the demand for the good or service.C) New firms must operate more efficiently in order to overcome the competitive advantage of existing firms.D) Sellers and buyers are well informed about available quantity but not prices.Answer: BTopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking7) In order for perfect competition to arise, it must be the case thatA) demand for the good or service is large relative to the minimum efficient scale of any single producer.B) firms produce a good or service that is identical to those of its competitors.C) the time frame under consideration is very long.D) Both answers A and B are correct.Answer: DTopic: How Perfect Competition ArisesSkill: RecognitionAACSB: Reflective Thinking8) In perfect competition,.A) there are restrictions on entry into the industryB) firms in the industry have advantages over firms that plan to enter the industryC) only firms know their competitors* pricesD) there are many firms that sell identical productsAnswer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking9) Perfect competition is an industry withA) a few firms producing identical goods.B) a few firms producing goods that differ somewhat in quality.C) many firms producing identical goods.D) many firms producing goods that differ somewhat.Answer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking10) Perfect competition exists in an industry ifA) there are many firms producing an identical product.B) there are many firms producing a similar product, each of which may have unique features.C) the firm is protected by a barrier to entry.D) the firm is always at the break-even point where it is earning only a normal profit.Answer: ATopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking11) An industry is perfectly competitive ifA) each firm in it can influence the price of its product.B) there are many firms in it, each selling a slightly different product.C) there are many firms in it, each selling an identical product.D) there are few firms in the industry.Answer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking12) In a perfectly competitive industry, there areA) many buyers and many sellers.B) many buyers, but there might be only one or two sellers.C) many sellers, but there might be only one or two buyers.D) one firm that sets the price for the others to follow.Answer: ATopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking13) In perfect competition, the product of a single firmA) has many perfect substitutes produced by other firms.B) has many perfect complements produced by other firms.C) is sold under many differing brand names.D) is sold to different customers at different prices.Answer: ATopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking14) Which of the following is a defining characteristic of a perfectly competitive industry?A) advertisements by well known celebritiesB) persistent economic profits in the long runC) no restrictions on entry into the industryD) higher prices being charged for certain name brandsAnswer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking15) Which of the following is true regarding perfect competition?I) The firms are price takers.J) . Marginal revenue equals the price of the product.K) I. Established firms have no advantage over new firms.L) I and IIM) II and IIIN) I, II and IIIO) I onlyAnswer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking16) Perfect competition implies thatA) there are many firms in the industry.B) all firms are price takers.C) all firms are producing the same identical product.D) All of the above answers are correct.Answer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking17) A perfectly competitive industry is characterized byA) high barriers to entry.B) firms that are price setters.C) firms facing a downward sloping demand curve.D) easy entry into the industry.Answer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking18) In perfect competition, restrictions on entry into an industry A) apply to both capital and labor.B) apply to labor but not to capital.C) apply to capital but not to labor.D) do not exist.Answer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking19) Which of the following is NOT an assumption of perfect competition?A) many firmsB) many buyersC) restricted entry into the industryD) each firm sells an identical productAnswer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking20) Which of the following is NOT an assumption of perfect competition?A) Firms compete by making their product different from products produced by other firms.B) There are no restrictions on entry into the industry.C) Established firms have no advantage over new firms.D) Sellers and buyers are well informed about prices.Answer: ATopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking21) Which of the following is NOT an assumption of perfectly competitive markets?A) many buyers and many sellersB) no restriction on entryC) complete information about pricesD) new entrants have higher costsAnswer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking22) Which of the following is NOT an assumption of perfect competition?A) There are many firms, each selling an identical product.B) There are many buyers.C) The price each firm sets differs from the prices set by the other firms.D) There are no restrictions on entry into the industry.Answer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking23) Which of the following is NOT a defining characteristic of perfectly competitive industries?A) many buyers and sellersB) unrestricted entry and exitC) consumer knowledge about prices charged by each firmD) higher prices being charged for certain name brandsAnswer: DTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking24) Which of the following is NOT a characteristic of a perfectly competitive industry?A) There are many firms.B) There are no restrictions on entry into the industry.C) Each firm produces a slightly differentiated product.D) Each firm takes price as given, determined by the equilibrium of industry supply and industry demand.Answer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking25) Which of the following is NOT a characteristic of perfect competition?A) There are many firms, each selling an identical product.B) There are many buyers.C) Firms in the industry have an advantage over potential new entrants.D) Firms and buyers are well informed about the prices of the products of each firm in the industry.Answer: CTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking26) An example of a perfectly competitive industry isA) a big city police department.B) the market for com in the United States.C) the market fbr French impressionists* paintings.D) the National Football League.Answer: BTopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking27) An example of a perfectly competitive firm isA) an oat farmer in the United States.B) the local cable TV company.C) a U.S. automobile producer.D) a big city newspaper.Answer: ATopic: Perfect CompetitionSkill: RecognitionAACSB: Reflective Thinking28) In perfect competition,A) each firm can influence the price of the good.B) there are few buyers.C) there are significant restrictions on entry.D) all firms in the market sell their product at the same price.Answer: DTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking29) In perfect competition, each firm.A) can influence the price that it chargesB) produces as much as it canC) is a price takerD) faces a perfectly inelastic demand for its productAnswer: CTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking30) In a perfectly competitive industryA) each firm sets its own price so that it is different from the prices of its competitors.B) earning an economic profit is certain.C) each firm is a price taker.D) consumers band together to demand the lowest price possible.Answer: CTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking31) The assumption that a perfectly competitive industry has many sellers, each selling an identical product, leads to the conclusion thatA) consumers get to see a variety of outputs.B) there are many buyers.C) the economic profit will be positive in the long run.D) firms are price takers.Answer: DTopic: Price TakersSkill: ConceptualAACSB: Reflective Thinking32) If a firm is in a perfectly competitive industry, thenA) it cannot earn an economic profit in the short run.B) it will have no fixed costs in the short run.C) the demand for its product is perfectly elastic.D) it cannot survive in the long run.Answer: CTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking33) When a firm is considered to be a "price taker" that means that the firmA) can charge any price that it wants to charge, that is,"take" any price it wants.B) pays a fixed price for all of its inputs.C) will accept ("take") the lowest price that its customers offer.D) cannot influence the market price of the good that it sells.Answer: DTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking34) Individual firms in perfectly competitive industries are price takers becauseA) the government sets all prices.B) buyers set prices.C) firms decide together on the best price to charge.D) each individual firm is too small to affect the market price.Answer: DTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking35) In perfect competition, the market demand for the good perfectly elastic and thedemand for the output of one firm perfectly elastic.A) is; isB) is; is notC) is not; isD) is not; is notAnswer: CTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking36) In a perfectly competitive market,A) each firm sets its own price so that it is different from its competitors.B) an economic profit is certain.C) each firm takes the good*s price as given to it by the market.D) consumers are persuaded by advertising.Answer: CTopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking37) Price taking behavior exists inA) perfectly competitive markets.B) markets with a monopolist, where consumers have to take price as it is given to them by the monopolist.C) automobile markets where consumers have to take the price set by the dealer.D) Both answers B and C are correct.Answer: ATopic: Price TakersSkill: RecognitionAACSB: Reflective Thinking38) In perfect competition, an individual firmA) sets the price and determines the quantity it sells in the marketplace.B) sets the price but does not determine the quantity it sells in the marketplace.C) determines the quantity it sells in the marketplace but has no influence over its price.D) can not affect its price nor determine the quantity it sells in the marketplace.Answer: CTopic: Price TakersSkill: ConceptualAACSB: Reflective Thinking39) The market for lawn services is perfectly competitive. Larry's Lawn Service cannot increase its total revenue by raising its price because.A) Larry's supply of lawn services is perfectly inelasticB) the demand for Larry's services is perfectly inelasticC) Larry*s supply of lawn services is inelasticD) the demand for Larry*s services is perfectly elasticAnswer: DTopic: Price TakersSkill: ConceptualAACSB: Reflective Thinking40) The price elasticity of demand fbr any particular perfectly competitive firm*s output isA) less than 1.B) 1.C) equal to zero.D) infinite.Answer: DTopic: Price TakersSkill: ConceptualAACSB: Reflective Thinking41) The demand for wheat from farm A is p