MICROECON CHAP 8

Which of the following refers to the perfectly competitive firm?

• A firm that is a price maker and price taker

• A firm that has no competition and controls the market.
• A firm that is a price maker

• A firm that is a price taker in a market with many buyers and sellers.

All of the following except one are characteristics of a perfect competition. Which is the exception?

• Firms can freely enter and exit the market.
• Firms have identical products.
• There is extensive advertising

• There are many buyers and sellers.

What is the term for the amount of revenue received per unit sold?

• Total revenue
• Cost per unit
• Sales price
• Average revenue

What is the term for the extra revenue derived from the sale of one more unit?

• Average Revenue
• Fixed Revenue
• Total Revenue
• Marginal Revenue

What is the formula for Total revenue?

• Total Revenue = Price per Unit × Quantity Sold
• Total Revenue = Price per Unit - Quantity Sold
• Total Revenue = Price per Unit + Quantity Sold
• Total Revenue = Cost per Unit × Quantity Sold

For a firm in equilibrium in a perfectly competitive market, which of the following is false?

• MR= P

• MR=AR

• TC=MC

• AR=P

What is the term for output when a firm reaches the point of zero economic profit?

• Negative profit
• Explicit output

• Breakeven output

• Implicit output

As a perfectly competitive firm produces more units, TR will:

• TR will decrease.
• TR will remain constant.
• TR will fluctuate unpredictably.
• TR will increase steadily

When is a competitive firms profits maximized1?

• When P=MC

• When P=AC

• When MR=AC

• When fixed costs are at their highest.

What are the break-even levels of output?

• OUTPUT 4&6

• OUTPUT 5&7

• OUTPUT 0

• OUTPUT 6