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QUIZ 3
ECON 1510 : PRINCIPLES OF MICROECONOMICS

Answer ALL Questions

1. Which of the following industries most closely approximates pure
competition?
A. agriculture
B. farm implements
C. clothing
D. steel

2. In which of the following industry structures is the entry of
new firms the most difficult?
A. pure monopoly
B. oligopoly
C. monopolistic competition
D. pure competition

3. Which of the following statements applies to a purely
competitive producer?
A. It will not advertise its product.
B. In long-run equilibrium it will earn an economic profit.
C. Its product will have a brand name.
D. Its product is slightly different from those of its
competitors.

4. Which of the following is characteristic of a purely competitive
seller’s demand curve?
A. Price and marginal revenue are equal at all levels of
output.
B. Average revenue is less than price.
C. Its elasticity coefficient is 1 at all levels of output.
D. It is the same as the market demand curve.

5. If a firm in a purely competitive industry is confronted with an
equilibrium price of $5, its marginal revenue:
A. may be either greater or less than $5.
B. will also be $5.
C. will be less than $5.
D. will be greater than $5.

6. For a purely competitive firm total revenue:
A. is price times quantity sold.
B. increases by a constant absolute amount as output expands.
C. graphs as a straight upsloping line from the origin.
D. has all of these characteristics.

7. The demand curve in a purely competitive industry is ______,
while the demand curve to a single firm in that industry is
______.
A. perfectly inelastic, perfectly elastic
B. downsloping, perfectly elastic
C. downsloping, perfectly inelastic
D. perfectly elastic, downsloping

8. Marginal revenue is the:
A. change in product price associated with the sale of one more
unit of output.
B. change in average revenue associated with the sale of one more
unit of output.
C. difference between product price and average total cost.
D. change in total revenue associated with the sale of one more
unit of output.

9. A competitive firm in the short run can determine the
profit-maximizing (or loss-minimizing) output by equating:
A. price and average total cost.
B. price and average fixed cost.
C. marginal revenue and marginal cost.
D. price and marginal revenue.

10. In the short run a purely competitive firm that seeks to
maximize profit will produce:
A. where the demand and the ATC curves intersect.
B. where total revenue exceeds total cost by the maximum
amount.
C. that output where economic profits are zero.
D. at any point where the total revenue and total cost curves
intersect.

Please answer all I have already answered and I just want to make
sure my answers are correct