ECON910

Assume a graph where dollars are measured on the vertical axis and output on the horizontal axis. For a purely competitive firm, total revenue:
A. graphs as a straight, up-sloping line.
B. is a straight line, parallel to the horizontal axis.
C. is a straight line, parallel to the vertical axis.
D. graphs as a straight, down-sloping line.

A firm reaches a break-even point where:
A. total revenue and total costs are equal.
B. marginal cost intersects the average variable cost curve.
C. total revenue equals total variable cost.
D. marginal revenue cuts the horizontal axis.

A purely competitive seller's average revenue curve coincides with:
A. its marginal revenue curve only.
B. its demand curve only.
C. both its demand and marginal revenue curves.
D. neither its demand nor its marginal revenue.

In a purely competitve industry:
A. economic profits may persist in the long run, if consumer demand is strong and stable.
B. there may be economic profits in the long run, but not in the short run.
C. there may be economic profits in the short run, but not in the long run.
D. there will be no economic profits in either the short run or the long run.

A purely competitive firm's shor-run supply curve is:
A. perfectly elastic at the minimum average total cost.
B. up-sloping and equal to the portion of the marginal cost curve which lies above the average variable cost curve.
C. up-sloping and equal to the portion of the marginal cost curve which lies above the average total cost curve.
D. up-sloping, only when the industry is characterised by constant costs.

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. On the basis of this information we can say that corporation:
A. should close down in the short run.
B. is realising a loss of $60.
C. is realising an economic profit of $40.
D. is maximising its profits.

The demand curve in a purely competitive industry is ________, while the demand curve to a single firm in that industry is ____________.
A. Down-sloping, perfectly elastic.
B. Down-sloping, perfectly inelastic.
C. perfectly inelastic, perfectly elastic.
D. Perfectly elastic, down-sloping.

A competitive firm in the short-run can determine the profit-maximising (or loss-minimising) output by equating:
A. Price and average total cost.
B. Marginal revenue and marginal cost.
C. Price and marginal revenue.
D. Price and average fixed cost.

Assume a graph where dollars are measure on the vertical axis and output on the horizontal axis. For a purely competitive firm, marginal revenue:
A. Graphs as a straight, down-sloping line.
B. Is a straight line, parallel to the horizontal axis.
C. Graphs as a straight, up-sloping line.
D. Is a straight line, parallel to the vertical axis.

In the short run, a purley competitive firm will always make an economic profit if:
A. P=MC
B. P=ATC.
C. P>AVC
D. P>ATC

A firm finds that; its MR=MC output, its TC = $1000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
A. Liquidate its assets and go out of business.
B. Produce because it will realise and economic profit.
C. Close down in the short run.
D. Produce because the resulting loss is less than its TFC.

The demand schedule, or curve, confronted by the individual purely competitive firm is:
A. Perfectly inelastic.
B. Relatively elastic; that is, the elasticity coefficient is greater than unity.
C. Relatively inelastic; that is, the elasticity coefficient is less than unity.
D. Perfectly elastic.

If a firm, in a purely competitive industry, is confronted with and equilibrium price of $5. Its marginal revenue:
A. May be either grater or less than $5.
B. Will also be $5.
C. Will be greater than $5.
D. Will be less than $5.