Economics chapter 10 – Flashcards

The market for agricultural products such as wheat or corn would best be described by which market model?

It shows short-run cost curves for a competitive firm. At what price would the firm break even?

The fast-food restaurant industry would be an example of which market model?

A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should:

In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is:

A purely competitive firm can be identified by the fact that

Which idea is inconsistent with pure competition? -Product differentiation Price-taking behavior Freedom of entry or exit for firms A large number of buyers and sellers

If a firm increases its output quantity when marginal revenue is less than marginal cost then its profits will:

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profits or minimize losses, the firm should:

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below:

A purely competitive firm currently producing 20 units of output earns marginal revenues of $12 from each extra unit of output it sells. If it sells 30 units, then its total revenues would be:

If the demand curve faced by an individual firm is downward-sloping, the firm cannot be a:

In which market model are the conditions of entry the most difficult?

Which point is definitely not on the competitive firm's short-run supply curve?

If the market demand for the product increases, in the short run a purely competitive firm:

In which market model are the conditions of entry into the market easiest?

As long as an additional unit of output yields a marginal revenue larger than its marginal cost it will be adding to total profits of the firm.

In the short run, fixed costs are important in determining a firm's optimal level of output.

A purely competitive firm will be willing to produce even at a loss in the short run, as long as:

In a purely competitive industry, each firm:

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 1,000 units is $2.50. The minimum possible average variable cost is $2.00. The market price of the product is $2.50. To maximize profits or minimize losses, the firm should:

If a firm is a price taker, then the demand curve for the firm's product is:

Technological advance improves productivity in a purely competitive industry. This change will result in a shift

As long as its total revenues are greater than its total costs, a firm will earn positive economic profits.

Mutual interdependence would tend to limit control over price in which market model?

The total revenue of a purely competitive firm from 8 units of output is $48. Based on this information, total revenue for 9 units of output must be:

If a firm has at least some control over the price of its product, then the firm cannot be in which market model:

The short-run supply curve for a competitive firm is the:

Price is taken to be a "given" by an individual firm selling in a purely competitive market because:

In which two market models would advertising be used most often?

The Campus Crustacean Company receives $2 per box for its crawfish and is selling 1,600 boxes to maximize its profits. What is the profit per box of crawfish at this equilibrium level of output if the average variable cost is $1 per box and fixed costs are $1,200?

A profit-maximizing firm in the short run will expand output:

The wage rate increases in a purely competitive industry. This change will result in a(n):

Which is a feature of a purely competitive market?

Which of the following is a reason why individual firms under pure competition would not find it gainful to advertize their product?

In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if: