Question 1

If the demand increases for the product of an increasing-cost industry:

Accepted Answer

A)   short-run price goes up, but long-run price falls.
B)   long-run output goes up, but long-run price may go up or down.
C)   short-run output goes up, but long-run output may go up or down.
D)   long-run output goes up, but short-run price remains constant.
E)   short-run price goes up, and long-run price goes up.F) C) and D)
G) B) and E)

Question 2

Toy Productions makes toy trucks from steel according to Q = 50 + 100S - 0.5S2.If steel costs $49 and toy trucks sell for $7,the optimal level of steel usage is:

Accepted Answer

A)   50.
B)   43.
C)   100.
D)   93.
E)   133.F) A) and E)
G) A) and D)

Question 3

If the demand increases for the product of a decreasing-cost industry:

Accepted Answer

A)   short-run price goes up, but long-run price falls.
B)   long-run output goes up, but long-run price may go up or down.
C)   short-run output goes up, but long-run output may go up or down.
D)   long-run output goes up, but short-run price remains constant.
E)   long-run price goes up, but short-run price may go up or down.F) B) and C)
G) A) and B)

Question 4

A representative firm with long-run total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P.If it continues to operate in the long run,its profit-maximizing level of output is:

Accepted Answer

A)   1 unit.
B)   2 units.
C)   4 units.
D)   5 units.
E)   6 units.F) B) and C)
G) A) and E)

Question 5

A representative firm with long-run total cost given by TC = 2,000 + 20q + 5q2 operates in a competitive industry where the market demand is given by QD = 10,000 - 40P.The long-run equilibrium output of the industry will be:

Accepted Answer

A)   1,200 units.
B)   1,800 units.
C)   2,200 units.
D)   2,600 units.
E)   3,200 units.F) A) and E)
G) A) and D)

Question 6

In the model of perfect competition,there:

Accepted Answer

A)   are many firms producing differentiated products.
B)   are a few firms producing undifferentiated products.
C)   are a few firms producing differentiated products.
D)   are many firms producing undifferentiated products.
E)   is one firm producing a highly differentiated product.F) A) and E)
G) A) and C)

Question 7

If the perfectly competitive market supply of pork bellies shifts from QS,93 = 250 + 50P to QS,94 = 400 + 40P,and the market demand is given by QD = +10,000 - 200P,then the change in equilibrium price will be:

Accepted Answer

A)   $2.
B)   $1.
C)   $0.
D)   -$1.
E)   -$2.F) A) and C)
G) A) and E) B

Question 8

If the demand increases for the product of a constant-cost industry:

Accepted Answer

A)   long-run output goes up, but long-run price may go up or down.
B)   short-run output goes up, but long-run output may go up or down.
C)   short-run price goes up, but long-run price remains constant.
D)   long-run output goes up, but short-run price remains constant.
E)   long-run price goes up, but short-run price may go up or down.F) A) and E)
G) A) and C) C

Question 9

If a representative firm with long-run total cost given by TC = 2,000 + 20q + 5q2 operates in a competitive industry where the market demand is given by QD = 10,000 - 40P,in the long-run equilibrium there will be:

Accepted Answer

A)   60 firms.
B)   98 firms.
C)   106 firms.
D)   110 firms.
E)   120 firms.F) A) and D)
G) B) and E) A

Question 10

Paul's Pizza Parlor bakes pizza pies according to Q = 3L - 0.3L2.If labor costs $6 and pizza sells for $10,the optimal amount of labor is:

Accepted Answer

A)   6.
B)   5.
C)   4.
D)   3.
E)   2.F) A) and B)
G) C) and E)

Question 11

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,410 - 40P and QS = -390 + 20P,its long-run profit-maximizing level of output is:

Accepted Answer

A)   0 units.
B)   1 unit.
C)   2 units.
D)   5 units.
E)   7 units.F) C) and D)
G) A) and B)

Question 12

If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P,its short-run profit-maximizing level of output is:

Accepted Answer

A)   0 units.
B)   1 unit.
C)   2 units.
D)   4 units.
E)   6 units.F) A) and C)
G) All of the above

Question 13

If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P,the number of firms operating in the short run will be:

Accepted Answer

A)   100.
B)   140.
C)   200.
D)   280.
E)   240.F) C) and D)
G) None of the above

Question 14

A constant-cost industry is one in which:

Accepted Answer

A)   input prices do not change over time.
B)   technology does not change over time.
C)   input prices and technology do not change as firms enter or exit the industry.
D)   input prices and technology do not change over time.
E)   firms have reached the maturity phase of the industry's life cycle.F) A) and C)
G) D) and E)

Question 15

The long-run supply curve for a product is horizontal with ATC = 200.Market demand is defined as P = 1,000 - 5Q.The market is competitive and is in long-run equilibrium with 40 firms in the industry.If a $50 tax is imposed on sellers,how many firms will be in the industry at the new long-run equilibrium?

Accepted Answer

A)   44.
B)   37.
C)   32.
D)   29.
E)   28.F) A) and B)
G) B) and C)

Question 16

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q2 operates in a competitive industry where the market demand is given by QD = 1,410 - 40P,in the long-run equilibrium there will be:

Accepted Answer

A)   60 firms.
B)   98 firms.
C)   106 firms.
D)   110 firms.
E)   120 firms.F) A) and B)
G) C) and D)

Question 17

If the perfectly competitive market demand for tanning beds shifts from QD,91 = 1,230 - 5P to QD,92 = 740 - 5P and the market supply is given by QS = -100 + 2P,then the change in equilibrium quantity will be:

Accepted Answer

A)   140 units.
B)   280 units.
C)   -98 units.
D)   -140 units.
E)   -150 units.F) C) and D)
G) B) and E)

Question 18

If labor produces output according to Q = 8L1/2,labor costs $10,and output sells for $100,then the optimal level of L is:

Accepted Answer

A)   8.
B)   16.
C)   1,600.
D)   2.
E)   10.F) C) and D)
G) A) and B)

Question 19

The long-run supply curve for a product is horizontal with ATC = 400.Market demand is defined as P = 1,000 - 4Q.The market is competitive and is in long-run equilibrium with 50 firms in the industry.If demand increases to P = 1,240 - 4Q,how many firms will be in the industry at the new long-run equilibrium?

Accepted Answer

A)   30.
B)   40.
C)   50.
D)   60.
E)   70.F) D) and E)
G) B) and D)

Question 20

The long-run supply curve for a product is horizontal with ATC = 200.Market demand is defined as P = 1,000 - 4Q.The market is competitive and is in long-run equilibrium with 50 firms in the industry.If demand increases to P = 1,240 - 4Q,how many firms will be in the industry at the new long-run equilibrium?

Accepted Answer

A)   45.
B)   55.
C)   65.
D)   75.
E)   85.F) B) and D)
G) A) and C)

Exam 7: Perfect Competition

If the demand increases for the product of an increasing-cost industry:

Correct Answer
verified

Toy Productions makes toy trucks from steel according to Q = 50 + 100S - 0.5S².If steel costs $49 and toy trucks sell for $7,the optimal level of steel usage is:

Correct Answer
verified

If the demand increases for the product of a decreasing-cost industry:

Correct Answer
verified

A representative firm with long-run total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P.If it continues to operate in the long run,its profit-maximizing level of output is:

Correct Answer
verified

A representative firm with long-run total cost given by TC = 2,000 + 20q + 5q² operates in a competitive industry where the market demand is given by Q_D = 10,000 - 40P.The long-run equilibrium output of the industry will be:

Correct Answer
verified

In the model of perfect competition,there:

Correct Answer
verified

If the perfectly competitive market supply of pork bellies shifts from Q_S_,93 = 250 + 50P to Q_S_,94 = 400 + 40P,and the market demand is given by Q_D = +10,000 - 200P,then the change in equilibrium price will be:

Correct Answer
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B

If the demand increases for the product of a constant-cost industry:

Correct Answer
verified
C

If a representative firm with long-run total cost given by TC = 2,000 + 20q + 5q² operates in a competitive industry where the market demand is given by Q_D = 10,000 - 40P,in the long-run equilibrium there will be:

Correct Answer
verified
A

Paul's Pizza Parlor bakes pizza pies according to Q = 3L - 0.3L².If labor costs $6 and pizza sells for $10,the optimal amount of labor is:

Correct Answer
verified

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,410 - 40P and Q_S = -390 + 20P,its long-run profit-maximizing level of output is:

Correct Answer
verified

If a representative firm with total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P,its short-run profit-maximizing level of output is:

Correct Answer
verified

If a representative firm with total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P,the number of firms operating in the short run will be:

Correct Answer
verified

A constant-cost industry is one in which:

Correct Answer
verified

Correct Answer
verified

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q² operates in a competitive industry where the market demand is given by Q_D = 1,410 - 40P,in the long-run equilibrium there will be:

Correct Answer
verified

If the perfectly competitive market demand for tanning beds shifts from Q_D_,91 = 1,230 - 5P to Q_D_,92 = 740 - 5P and the market supply is given by Q_S = -100 + 2P,then the change in equilibrium quantity will be:

Correct Answer
verified

If labor produces output according to Q = 8L^1/2,labor costs $10,and output sells for $100,then the optimal level of L is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Exam 7: Perfect Competition

If the demand increases for the product of an increasing-cost industry:

Correct AnswerverifiedShow Answer

Toy Productions makes toy trucks from steel according to Q = 50 + 100S - 0.5S2.If steel costs $49 and toy trucks sell for $7,the optimal level of steel usage is:

Correct AnswerverifiedShow Answer

If the demand increases for the product of a decreasing-cost industry:

Correct AnswerverifiedShow Answer

A representative firm with long-run total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P.If it continues to operate in the long run,its profit-maximizing level of output is:

Correct AnswerverifiedShow Answer

A representative firm with long-run total cost given by TC = 2,000 + 20q + 5q2 operates in a competitive industry where the market demand is given by QD = 10,000 - 40P.The long-run equilibrium output of the industry will be:

Correct AnswerverifiedShow Answer

In the model of perfect competition,there:

Correct AnswerverifiedShow Answer

If the perfectly competitive market supply of pork bellies shifts from QS,93 = 250 + 50P to QS,94 = 400 + 40P,and the market demand is given by QD = +10,000 - 200P,then the change in equilibrium price will be:

Correct AnswerverifiedB

If the demand increases for the product of a constant-cost industry:

Correct AnswerverifiedC

If a representative firm with long-run total cost given by TC = 2,000 + 20q + 5q2 operates in a competitive industry where the market demand is given by QD = 10,000 - 40P,in the long-run equilibrium there will be:

Correct AnswerverifiedA

Paul's Pizza Parlor bakes pizza pies according to Q = 3L - 0.3L2.If labor costs $6 and pizza sells for $10,the optimal amount of labor is:

Correct AnswerverifiedShow Answer

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,410 - 40P and QS = -390 + 20P,its long-run profit-maximizing level of output is:

Correct AnswerverifiedShow Answer

If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P,its short-run profit-maximizing level of output is:

Correct AnswerverifiedShow Answer

If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P,the number of firms operating in the short run will be:

Correct AnswerverifiedShow Answer

A constant-cost industry is one in which:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q2 operates in a competitive industry where the market demand is given by QD = 1,410 - 40P,in the long-run equilibrium there will be:

Correct AnswerverifiedShow Answer

If the perfectly competitive market demand for tanning beds shifts from QD,91 = 1,230 - 5P to QD,92 = 740 - 5P and the market supply is given by QS = -100 + 2P,then the change in equilibrium quantity will be:

Correct AnswerverifiedShow Answer

If labor produces output according to Q = 8L1/2,labor costs $10,and output sells for $100,then the optimal level of L is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Toy Productions makes toy trucks from steel according to Q = 50 + 100S - 0.5S².If steel costs $49 and toy trucks sell for $7,the optimal level of steel usage is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A representative firm with long-run total cost given by TC = 2,000 + 20q + 5q² operates in a competitive industry where the market demand is given by Q_D = 10,000 - 40P.The long-run equilibrium output of the industry will be:

Correct Answer
verified

Correct Answer
verified

If the perfectly competitive market supply of pork bellies shifts from Q_S_,93 = 250 + 50P to Q_S_,94 = 400 + 40P,and the market demand is given by Q_D = +10,000 - 200P,then the change in equilibrium price will be:

Correct Answer
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B

Correct Answer
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C

If a representative firm with long-run total cost given by TC = 2,000 + 20q + 5q² operates in a competitive industry where the market demand is given by Q_D = 10,000 - 40P,in the long-run equilibrium there will be:

Correct Answer
verified
A

Paul's Pizza Parlor bakes pizza pies according to Q = 3L - 0.3L².If labor costs $6 and pizza sells for $10,the optimal amount of labor is:

Correct Answer
verified

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,410 - 40P and Q_S = -390 + 20P,its long-run profit-maximizing level of output is:

Correct Answer
verified

If a representative firm with total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P,its short-run profit-maximizing level of output is:

Correct Answer
verified

If a representative firm with total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P,the number of firms operating in the short run will be:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If a representative firm with long-run total cost given by TC = 50 + 2q + 2q² operates in a competitive industry where the market demand is given by Q_D = 1,410 - 40P,in the long-run equilibrium there will be:

Correct Answer
verified

If the perfectly competitive market demand for tanning beds shifts from Q_D_,91 = 1,230 - 5P to Q_D_,92 = 740 - 5P and the market supply is given by Q_S = -100 + 2P,then the change in equilibrium quantity will be:

Correct Answer
verified

If labor produces output according to Q = 8L^1/2,labor costs $10,and output sells for $100,then the optimal level of L is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
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