Holt 7525-9 S15_IT

___ 8. What is the marginal cost of the 4 th unit of output?
a. $4
b. $6
c. $8
d. $10
___ 9. What is the profit when six units of output are produced?
a. $7
b. $5
c. $3
d. $1
___ 10. What is the profit-maximizing quantity of output?
a. 6
b. 5
c. 3
d. 2
___ 11. If a perfect competitor produces the quantity of output where marginal revenue equals
marginal cost, when price is greater than ATC, it:
a. will earn economic profit
b. incurs a loss less than fixed costs
c. incurs a loss greater than fixed costs
d. All of the above are possible
___ 12. If a perfect competitor produces the quantity of output where marginal revenue equals
marginal cost, when price is less than ATC, but greater than AVC, it:
a. incurs a loss greater than fixed costs
b. incurs a loss equal to fixed costs
c. incurs a loss less than fixed costs
d. All of the above are possible
___ 13. If a perfect competitor produces the quantity of output where marginal revenue equals
marginal cost, when price is less than AVC, it:
a. incurs a loss greater than fixed costs
b. incurs a loss equal to fixed costs
c. incurs a loss less than fixed costs
d. All of the above are possible
___ 14. In a perfectly competitive market, in the long run:
a. firms will tend to earn zero economic profit
b. price will be equal to minimum ATC
c. Both of the above
d. Neither of the above
___ 15. Perfect competition results in:
a. the most efficient quantity of output
b. the quantity of output where price equals marginal cost
c. the quantity of output where marginal social benefit equals marginal social cost
(assuming no externalities)
d. All of the above
___ 16. The goal of a perfect competitor:
a. is to maximize profits
b. coincides with society’s goal of economic efficiency
c. Both of the above
d. Neither of the above
FOR REVIEW ONLY - NOT FOR DISTRIBUTION
Perfect Competition 21 - 12