Micro Ecnomics

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Submitted by Memon, Imran (imemon15) on 11/19/2012 9:01:50 PM

Points Awarded | 48.00 |

Points Missed | 52.00 |

Percentage | 48.0% |

1.

Which of the following is not an assumption of the theory of perfect competition?

A) There are many sellers and many buyers, none of which is large in relation to total sales or purchases.

B) Each firm produces and sells a differentiated product.

C) Buyers and sellers have all relevant information with respect to prices, product quality, and sources of supply.

D) There is easy entry and exit.

Points Earned: | 0.0/2.0 | |

Correct Answer(s): | B |

2.

A "price taker" is a firm that

A) does not have the ability to control the price of the product it sells.

B) does have the ability, although limited, to control the price of the product it sells.

C) can raise the price of the product it sells and still sell some units of its product.

D) sells a differentiated product.

E) none of the above

Points Earned: | 0.0/1.0 | |

Correct Answer(s): | A |

3.

The demand curve for a perfectly competitive firm

A) is downward sloping.

B) is upward sloping.

C) is perfectly horizontal.

D) is perfectly vertical.

E) may be downward or upward sloping, depending upon the type of product offered for sale.

Points Earned: | 2.0/2.0 | |

Correct Answer(s): | C |

4.

The market demand curve in a perfectly competitive market is

A) downward sloping.

B) upward sloping.

C) perfectly horizontal.

D) perfectly vertical.

E) downward or upward sloping depending upon the type of product offered for sale.

Points Earned: | 2.0/2.0 | |

Correct Answer(s): | A |

5.

For a perfectly competitive firm,

A) the marginal revenue curve and the demand curve are the same.

B) the marginal revenue curve and the marginal cost curve are the same.

C) the supply curve and the marginal revenue curve are the same.

D) the demand...