Question

13) The cost the Almy type of market 7) The market is an example of A) mattress: a monopoly B) com a perfectly competitive C) car insurance an oligopoly D) cell phone; a perfectly competitive 5) airplane manufacturing a monopolistically competitive 8) What is the difference between perfect competition and monopolistic competition? A) Perfect competition has a large number of small firms while monopolistic competition does not in monopolistic competition, firms produce identical goods, while in perfect competition, firms produce slightly different goods. C) Perfect competition has no barriers to entry, while monopolistic competition does. D) In perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods. Perfect competition has barriers to entry while monopolistic competition does not. 9) What is measured by the price elasticity of supply? A) The price elasticity of supply is a measure of the slope of the supply curve. The price elasticity of supply measures how responsive producers are to changes in the price of a product. The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product. D) The price elasticity of supply measures how responsive producers are to changes in income. E) The price elasticity of supply measures how responsive producers are to changes in the price of other goods. 800.722.6876 www.ScartronStore.com Qurder Form No. SC982-E 10) A competitive market with no externalities is efficient when it is in equilibrium because A) marginal benefit equals marginal cost. B) the deadweight gain equals its maximum. total benefit equals total cost. D) the sum of consumer surplus plus producer surplus is minimized. E) consumer surplus equals producer surplus. 10) Total cost includes A) the cost of variable resources only. B) the cost of fixed resources only. C) the cost of both variable and fixed resources. D) the cost of neither variable nor fixed resources all explicit costs and all the implicit costs that actually must be paid using money. SUBJECT NAME:Naraya 11) competitive market with no extemalities, at the equilibrium price, marginal benefit exceeds marginal cost. buyers cannot control the price, so the consumer surplus is zero. at the equilibrium price, marginal benefit equals marginal cost. at the equilibrium price, the total amount of consumer surplus equals the total amount of Producer surplus. me consumer surplus is equal to zero because of competition. equilibrium price, so the consumer alginal cost. 12)

Answer 1

Q.1. In part, Perfect competition araises if

A.1. Option A. i and ii

* The lack of economies of scale or network effects ensures that there will always be a sufficient number of firms in the industry.

** The products are perfect substitutes for each other, (i.e., the qualities and characteristics of a market good or service do not vary between different suppliers).

*** There are no barriers for entry and exit.

Q.2. The primary Goal of a business firm is to

A.2. Option C. Maximize profit.

* The primary purpose of a business is to maximize profits for its owners or stakeholders while maintaining corporate social responsibility.

Q.3. Which of the following is an explicit cost of production>

A.3. Option E. Answers A, B & C are all correct.

* An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, where no actual payment is made.

Q.4. It is very difficult for Gournet Chocolatier to find inexpensive and available inputs for the business. Because of this, we predit that Gournet Chocolatier's supply to be .

A.4. Option A. Inelastic

Q.5. A perfectly Competitive market arises when

A.5. Option C. the market demand is small relative to the output of a firm.

* Perfect competition occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.

** A Momopolistic market structure in which there is a large number of firms, each having a small portion of the market share and slightly differentiated products.

Q.6. A market with a large number of sellers.

A.6. Option D. can only be a perfectly competitive market.

* Perfect Competition: Meaning, Assumptions and Other Details! Perfect competition refers to a market situation in which there are large number of buyers and sellers of homogeneous products.

Q.7. The ........ Market is an example of ......... type of product.

A.7. Option D. Cellphone: a perfectly competitive market.

* where there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.

Q.8. What is the difference between perfect competition and monopolisticcompetition.

A.8. Option C. Perfect competiotion has no barriers to entry, while monopolistic competition does.

Option D is also correct. In perfect competition firms produce identical products while in monopolistic compettion firms produce slightly different goods.

Q.9. What is measured by the price elasticity of supply ?

A.9. Option A. The price elasticity of supply is a measure of the slope of the supply curve.

* Elasticity of supply measures the degree of responsiveness of quantity supplied to a change in own price of the commodity. It is also defined as the percentage change in quantity supplied divided by percentage change in price.

Q.10. A competitive market with no externalities is efficient when it is in equilibrium because.

A.10.Option A. Marginal benefit equals marginal cost.

* Competitive equilibrium can be used to predict the equilibrium price and total quantity in the market, as well as the quantity consumed by each individual and output per firm. At this equilibrium price, the quantity supplied by producers is equal to the quantity demanded by consumers.

Q.11. Total Cost Includes.

A.11. Option C. The cost of both variable and fixed resources.

Total Cost = Varaible Cost + Fixed Cost

Q.12. Competitive market with no externalities.

A.12. Option C. all the equilibrium price, marginal benefit equals marginal cost.

Q.13. The cost that does not change as output change is

A.13. Option E. Total Fixed Cost.

Fixed Costs do not change with output, firms must pay these even if they shut down.

Q.14. In the short run, a firm cannot change the amount of capital it uses, therefore the cost of capital is

A.14. Option C. Fixed Cost.

In short run, there are both fixed and variable costs. In long run there are only variable costs.

A.15. Option A. Total Variable cost equalled to $200,000

Total Cost = Variable cost + Fixed Cost

$286,000 = VC + $86,000

VC = $200,000

A.16. Option E. Producer Surplus.

A.17. Option D. Both A & B are correct.

A.18. Option D. Both answers A& B are correct.

A.19. Option D. i & iii

A.1.Option B.

A.2. Option A.

A.3. Option C

A.4. Option D

A.5. Option B

A.6. Option C

A.7.Option D

A.8. option A

A.9. option B

A.10 Option D

A.11 option D

A.12 Option D

A.13. Option D

A.14. Option B

A.15. Option B

A.16 Option B

A.17. option D

A.18 Option A

A.19 Option C

A.20. Option C