Question

1) Assumption for a Perfectly competitive firm include a: (select) [homogeneous, unique, diverse, heterogeneous] product essentially/theoretically (select) [several, infinite, few, finite] sellers and (select) [unique, infinite, few, several] buyers (select) [difficult, easy, expensive, diminishing availability] entry and exit

2) The perfectly competitive firm's supply curve is the:

a)marginal cost curve equal to and above the price/demand line

b) doesn't exist

c) no answer text provided

d) is downward sloping

e) upward sloping supply curve equal to the demand curve

3) An example of a monopoly firm would be

a) dannon yogurt

b) a car manufacturer

c) google search

d) UPS

4) Monopolist firms are called

a)monopoly makers

b) price creationists

c) price finders

d) price takers

5) the demand curve for a monopolist firm is:

a) upward sloping

b) not sloping

c) downward sloping

d) arched

6) In the long run the profits for a perfectly competitive firm is theoretically zero (select) [accounting, economic] profit(s) because of competition

7) For the P.C. firm in the long run Average Revenue is equal to the: (3 answers!)

a) the price

b) the economic cost

c) the marginal cost

d) the explicit cost

e) the accounting cost

f) the explicit-implicit cost

g) the implicit price

8) Karen runs a print shop that makes posters for large companies. It is a very competitive business. Her Short Run numbers are as Follows: The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,000 for the first thousand posters, $800 for the second thousand, and then $750 for each additional thousand posters.

What is her AFC per poster (not per thousand!) if she prints 1,000 posters? (select) $ [0.25, 0.12, 1, 25]

What is her ATC per poster if she prints 1,000? (select) $ [1.25, 1.025, 0.25, 12.5]

What is her ATC per poster if she prints 2,000? (select) $ [1.25, 1.025, 0.25, 12.5]

What is the Profit (Accounting) if she prints 1000 posters? (select) $ [0, -25, -50, -250]

Should she produce (select) [indifferent between producing and not, yes produce, no shut down]

What is the Profit (Accounting) if she prints 2000 posters? (select) $ [1000, 0, -50, 50]

Should she produce (select) [indifferent between producing and not, yes produce, no shut down]

9)A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land show diminishing returns, because some are better suited for wheat production than others. The first acre can produce 1000 bushels of wheat, the second acre 900, the third 800, and so on. In the table given below answer the following questions. How many bushels will each of the farmer’s five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre?

Acres That That Acre's TR MR
Planted Acre's Yield Revenue

0 -   -   -    -  

1 1000   10,000   10,000 10,000

2 900   9000                               

(select) [19,000", 29,000, 20,000", 9000"]            9000

3 800    ( Select) [10,000, 8000, 1000, 7000]                                   

( Select)    [34000, 27,000, 30000, 20,000]            8000

4 700 ( Select ) [27000, 1000, 7000, 10000]           

34,000 7,000

5 600   (Select ) [1000, 6000, 7000, 10000]                                          (Select )    [20,000, 34000, 40000, 10000]           6,000

Answer 1

(1) Assumption for a Perfectly competitive firm include a: homogeneous product, several sellers and several buyers, and easy entry and exit.

(2) (a)

Firm supply curve is the portion of MC curve lying above the price line.

(3) (c)

(4) (c)

Monopolist sets its own price, so it s price-finder (searcher).

(5) (c)

Demand curve for a price-finder firm is downward sloping.

NOTE: As HOMEWORKLIB Answering Policy, 1st 5 questions are answered.