Chapter 9: Perfect Competition in the Short Run
Multiple Choice Exam Level 1

1.  

A market in which there are only a few firms is called:
monopolistic competition
an oligopoly
a monopoly
perfect competition
none of the above

2.  

In which market does the seller have no control over prices?
monopoly
monopolistic competition
oligopoly
perfect competition
duopoly

3.  

The price at which the firm is indifferent between operating and shutting down is a
shut-down price.
market price.
equilibrium price.
break-even price.
sunk price.

4.  

If a producer of sweaters is willing to produce a sweater at $34 and the market price for that sweater is $42, then the producer surplus is
$76.
$8.
$0.
$10.
$42.

5.  

A cost a firm has already paid or has already agreed to pay is a/an
implicit cost.
sunk cost.
explicit cost.
variable cost.
shut-down cost.

6.  

A curve showing the relationship between price and the quantity of output supplied by an entire industry is a
short-run supply curve.
short-run marginal cost curve.
demand curve.
short-run market supply curve.
short-run average variable cost curve.

7.  

Suppose that an additional unit of output would require 5 additional hours of labor and 7 additional units of materials. If the wage is $15 per hour and the price of materials is $2 per unit, what is the marginal cost of production?
$34
$89
$10
$70
$14

8.  

If a television. producer can sell 60 televisions per day at a price of $12 per television, the benefit of operating its production facility is how much per day?
$38
$120
$580
$720
$12

9.  

The short-run marginal cost curve and the shut-down price define which type of curve?
the short-run supply curve
the short-run average cost curve
the short-run market demand curve
the long-run demand curve
the short-run variable cost curve

10.  

Economic profit is
the money the firm gets from selling its product.
total revenue minus explicit costs.
total revenue minus the total of explicit and implicit costs.
total revenue minus implicit costs.
total revenue plus explicit costs.


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