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micro quiz 5.pdf

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ECON 1000
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Principles of Microeconomics Quiz 5Fall 2007NameMULTIPLE CHOICEChoose the one alternative that best completes the statement or answers the question on theaccompanying scantron1Perfect competition exists in an industry if1Athe firm is always at the breakeven point where it is earning only a normal profitBthe firm chooses price to maximize profitCthere are many firms producing a similar product each of which may have uniquefeaturesDthere are many firms producing an identical product2If the minimum efficient scale of a firm is small relative to the demand for the good then2Afirms have a minimum efficiency and could do better by producing moreBthere will be no economic profits for any small firms so no new firms will enterCmany small firms can enter the marketDseveral large firms will enter the market thereby reducing competition3The difference between a firms total revenue and its total opportunity cost is the firms3Amarginal profitBnormal profitCeconomic profitDmarginal revenue4In a perfectly competitive market4Aan economic profit is certainBeach firm sets its own price so that it is different from its competitorsCeach firm takes the goods price as given to it by the marketDconsumers are persuaded by advertising5The firms goal is to5Amaximize its total revenueBmaximize its economic profitCmaximize its industrys revenueDmaximize its normal profit6A perfectly competitive firms marginal revenue6Ais less than the market price of its productBdecreases as the firm produces more outputCincreases as the firm produces more outputDequals the market price of its product1
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