Post-test
Post-test
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 1 In a competitive market for good X, the price of a complement good falls. If it is a constant-cost industry, we know that in the long run, equilibrium quantity will: A) increase and equilibrium price will remain the same. B) increase and equilibrium price will increase. C) decrease and equilibrium price will increase. D) decrease and equilibrium price will remain the same. 2 To maximize profits, a perfectly competitive firm should do all of the following except: A) produce until economic profits are maximized. B) produce until marginal cost equals price. C) produce until marginal revenue equals marginal cost. D) produce until per unit profits are maximized. 3 In a perfectly competitive market: A) price does more of the adjusting in the long run and quantity does more of the adjusting in the short run. B) price does more of the adjusting in the short run and quantity does more of the adjusting in the long run. C) only price adjusts in both the short run and the long run. D) only quantity adjusts in both the short run and the long run. 4 Refer to the table below. (5.0K) If the market price is \$6, a profit-maximizing firm would produce: A) 1 unit of output. B) 2 units of output. C) 3 units of output. D) 4 units of output. 5 The market supply curve is: A) the same as a firm's supply curve. B) equal to the horizontal sum of all the firms' marginal cost curves. C) equal to the vertical sum of all the firms' average total cost curves. D) equal to the horizontal sum of all the firms' average total cost curves. 6 Suppose there are 50 firms in a perfectly competitive market and each maximizes profit at 50 units of output when market price is \$15.00 per unit. One of the points on the market supply curve must be at: A) price = \$15 and quantity supplied = 2,500. B) price = \$15 and quantity supplied = 25,000. C) price = \$3.33 and quantity supplied = 2,500. D) price = \$3.33 and quantity supplied = 25,000. 7 Because the marginal cost curve tells us how much output a firm will produce at a given price, the marginal cost curve is the firm's: A) demand curve. B) average cost curve. C) marginal revenue curve. D) supply curve. 8 Refer to the graph below. (13.0K) If market price decreases from \$7.00 per unit to \$6.00 per unit, a profit-maximizing firm will: A) increase output from 650 to 750. B) decrease output from 850 to 750. C) continue to produce the same level of output. D) produce 850 units of output. 9 Refer to the graph below. (14.0K) Assuming that the industry continues to operate under conditions of perfect competition and that the cost curves do not shift, in the long run each firm will produce: A) 800 units of output. B) 1000 units of output. C) 1200 units of output. D) 1400 units of output. 10 Refer to the graph below. (14.0K) Assuming that the industry operates under conditions of perfect competition and that the firms seek to maximize profits each firm in the industry will: A) produce 800 square feet of construction per month in the short-run. B) produce 1000 square feet of construction per month in the short-run. C) produce 1200 square feet of construction in the short-run. D) incur economic losses in the short-run.