1. If the price of gasoline is $2.0, and the price elasticity of need is 0.5, how much will certainly a 10 % reduction in the quantity put on the market rise the price?

a.There will certainly be 22% boost in the price

b.There will be 5% rise in the price

c.There will certainly be 10 % boost in price

d.There will be 20% rise in price

e. No one of the above

2.The consumer"s budget plan line

a. Indicates the options from i beg your pardon the customer can choose

b. Identify the optimal basket for the consumer.

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c. Identifies the tastes of the consumer

d. Ranking the baskets of items in the stimulate the customer prefers them

e. Shows that the consumer prefers more much better than less

3. In the long run, a profit-maximizing firm will pick to departure a industry whena. Fixed costs exceed sunk costs.b. Median fixed price is rising.c. Revenue from production is less than full costs.d. Marginal expense exceeds marginal revenue at the current level the production.4. Once a perfectly competitive firm makes a decision to shut down, it is most most likely thata. Price is below the minimum of average variable cost.b. Fixed expenses exceed variable costs.c. Typical fixed prices are rising.d. Marginal expense is above average change cost.

5. Which of the complying with will always cause the need curve for a product to shift to the right?

a. Boost in revenue whether the an excellent is a compliment or substitute

b. Boost in the price of the compliment

c. Boost in the price that a substitute

d. Rise in technology

e. A decrease in the price the the good

6. Consumer understandably like lower prices, however they should recognize there is a great difference in between a reduced price developed by the federal government price ceiling and also a lower price that comes about through normal industry channels, one benefits the consumer, the other may not.

a. This explain is not true, Consumers room benefited as soon as the federal government lowers the price and also the consumers room benefited as soon as businesses lower the price.

b. This is since when the government forces prices down, there is a shortage and reduction in total surplus. Reduced prices through industries don"t create shortage yet they do benefit consumers.

c. This is due to the fact that the government forces prices down, there is a surplus and also reduction in full surplus. Reduced prices through markets don"t produce surpluses yet they do benefit consumers

d. This is due to the fact that when markets pressure the prices down, there is a shortage and also reduction in complete surplus. Reduced prices through federal government actions don"t develop shortages however they do advantage consumers

e. None of the above

7. How does boost in the price that a variable input impact the AC and also the MC curves?

a. MC shifts to the right and AC increases.

b. MC shifts to the left and also AC increases

c. MC move to the right and AC does no change

d. MC go not change but AC increases

e. No one of the above


8. I beg your pardon of the following is a characteristic of a perfect competitive market?a. Firms room price setters.b. Over there are couple of sellers in the market.c. Firms have the right to exit and also enter the industry freely.d. Every one of the over are correct.

9. In a perfect competitive market, the process of entry or leave ends whena. Firms space operating v excess capacity.b. Firms room making zero economic profit.c. Firms experience decreasing marginal revenue.d. Price is same to marginal cost.


10. The loved one price the two products is displayed by:

a. The steep of an indifference curve

b. The slope of the spending plan line

c. The diminishing marginal rate of substitution

d. The slope of the income-consumption curve

e. Nobody of the above

11. As soon as firms have an inspiration to departure a compete market, their exit will

a. Drive down industry prices.b. Drive down the revenues of existing this firm in the market.c. Decrease the variety of goods gave in the market.d. Every one of the over are correct.

12. If a perfectly competitive firm at this time produces where the price is better than the marginal cost, it

a. Will increase its profits by developing more.b. Will rise its earnings by developing less.c. Is making positive economic profits.d. Is making negative economic profits.


13. Go a consumer well being differ along a demand curve?

a. Yes. As soon as price increases, consumers move to a lower indifference curve.

b. Yes. Once price increases, consumers relocate to a greater indifference curve.

c. No. When price increases, consumers continue to be on the exact same indifference curve.

d. No. As soon as price increases, the higher price has actually no result on spending plan constraints or indifference curves.

e. No one of the above


14. If a competitive firm sets its calculation such the marginal revenue, marginal cost, and also average complete cost room equal, financial profit need to be:

a. Negative

b. Positive

c. Zero

d. Indeterminate native the provided information

15. I m sorry of the adhering to is a properties of a perfectly competitive market?

a. Firms are price setters.

b. Over there are couple of sellers in the market.c. Firms deserve to exit and also enter the market freely.d. All of the over are correct.

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A. A vain firm

can take into consideration only its ar in setup the price.must basic its competitive price on product differentiation.has the capability to collection its own price.must accept the price identified by the intersection of the industry supply and also demand curves.has no it is provided curve.

B. If a certain is make an financial profit, then

the factors of production are being paid their possibility costs.there will be no readjust in the number of firms if the market is perfectly competitive.the components of production are gift paid much less than their possibility costs.the determinants of production are being paid much more than their opportunity costs.the for sure will exit the industry

C. Along a downward-sloping syndicate demand curve,

marginal revenue is higher than price.the elasticity of need is constant.marginal revenue decreases as soon as the price decreases.marginal revenue is equal to zero as soon as the price is same to zero

D. If, in the quick run, a perfectly competitive for sure is creating at a allude where the total cost is greater than complete revenue, then the firm should

shut down since economic revenues are negative.continue to create as long as ns > AVC.continue to create because audit profits space positive.set a higher price because that its output.set a lower price because that its output

E. For a perfect competitive firm, the demand curve is

the marginal revenue curve.perfectly inelastic.always same to marginal cost.the same as the market need curve

F. A for sure in a(n) industry will have actually the many elastic demand curve

monopolisticoligopolisticmonopolistically competitiveperfectly competitive

G. If the demand curve the a monopolist is in the inelastic range, then

total revenue will autumn if the price increases.total revenue will certainly be the same if the price increases.total revenue will increase if the price increases.the total supply will increase by an same amount if demand increases.the price will certainly be the same if complete revenue increases

H. Monopolistic competition and also oligopoly are instances of

monopoly.perfect competition.theories of consumer behavior.imperfect competition.the extreme situations on the sector structure continuum

I. Under which sector structure do firms face the flattest (most elastic) need curve?

perfect competitionmonopolistic competitionoligopolymonopoly

J. At the allude of long-run equilibrium for a perfect competitive firm,