A.   Because it allows us to analyze how markets work when the invisible hand is completely impeded and market forces are not allowed to work. This can be used as a reference point when analyzing a market that is not perfectly competitive.

B.   Because it allows us to analyze how markets work when the invisible hand is completely unimpeded. This can be used as a reference point when analyzing a market that is not perfectly competitive.

C.   Because it allows us to analyze how markets work when the invisible hand is completely impeded and market forces are not allowed to work. This can be used as a reference point when analyzing a market that is perfectly competitive.

D.   Due to the fact that perfect competition is an optimal economic situation.

A.   Chooses output based off of weather conditions.

B.   Chooses the price it sells at.

C.   Chooses output in response to a market-determined price.

D.   Chooses own price based on the demand curve it faces.

E.   Chooses its own price, but after consulting with other comp.anies

A.   Sellers are price takers, but consumers do have an impact on the price.

B.   Consumers are price takers, but sellers do have an impact on the price.

C.   Both sellers and consumers are price takers and have no impact on the price in the market.

D.   Both sellers and consumers are not price takers and can impact the price in the market.

A.   Buyers are often price takers, but sellers are usually price makers.

B.   Both buyers and sellers are usually price takers.

C.   Buyers are often price makers, but sellers are usually price takers.

D.   Both buyers and sellers are usually price makers.

A.   Corn production.

B.   Fast-food industry.

C.   Automobile production industry.

D.   Landscaping industry.

A.   Soda.

B.   Energy drinks.

C.   Textbooks.

D.   Soy beans.

A.   Perfectly inelastic.

B.   Relatively inelastic.

C.   Relatively elastic.

D.   Perfectly elastic.

A.   Downward-sloping.

B.   A horizontal line.

C.   A vertical line.

D.   Upward-sloping.

A.   FALSE

B.   TRUE

A.   FALSE

B.   TRUE

A.   $5.00 and marginal revenue for the firm is $3.00.

B.   $6.50 and marginal revenue for the firm is $6.50.

C.   $6.50 and marginal revenue for the firm is $5.00.

D.   $5.00 and marginal revenue for the firm is $5.00.

A.   $3.50.

B.   $6.50.

C.   $3.00.

D.   $5.00.

A.   40 units of output.

B.   60 units of output.

C.   50 units of output.

D.   30 units of output.

A.   Horizontal demand curve.

B.   Demand curve.

C.   None of the available answers.

D.   Supply curve.

E.   Profit per unit.

A.   Quantity supplied is greater than 25, but less than 27.

B.   Quantity supplied is 27.

C.   Quantity supplied is 25.

D.   Quantity supplied is 26.

A.   450 units of output.

B.   850 units of output.

C.   650 units of output.

D.   Between 550 and 650 units of output.

A.   Produce 850 units of output.

B.   Continue to produce 850 units.

C.   Increase output from 650 to 750.

D.   Decrease output from 850 to 750.

A.   $0

B.   $38

C.   $30

D.   –$38.

A.   $0

B.   $38

C.   –$30.

D.   $30

A.   Are the total costs of production.

B.   Is the amount of money that could have been earned by renting out that firm's capital.

C.   Are the amount of labor that needs to be employed.

D.   Are the total labor costs from production.

A.   Output will be 100 units per day.

B.   Average cost of the product will be at the minimum possible level.

C.   The firm will earn $0 in economic profits.

D.   The firm will earn economic profits.

A.   The prevailing price is $4 and economic profits are $0.

B.   The prevailing price is $3 and economic profits are negative.

C.   The prevailing price is $8 and economic profits are positive.

D.   MC >MR.

A.   Economic profits are -$100 and the quantity supplied from the firm is 80 units per day.

B.   Economic profits are $100 and the quantity supplied from the firm is 100 units per day.

C.   Economic profits are $0 and the quantity supplied from the firm is 100 units per day.

D.   Economic profits are $500 and the quantity supplied from the firm is 200 units per day.

A.   Economic profits are negative, which means there is economic losses, and the quantity supplied from the firm is 60 units per day.

B.   Economic profits are negative, which means there is economic losses, and the quantity supplied from the firm is 100 units per day.

C.   Economic profits are negative, which means there is economic losses, and the quantity supplied from the firm is 80 units per day.

D.   Economic profits are positive, and the quantity supplied from the firm is 120 units per day.

A.   No, due to the fact that the operating loss is -$24, which is much smaller than the loss incurred if they were to shutdown.  If they were to shutdown, the loss would equal the fixed costs or -$84.50.

B.   No, due to the fact that the operating loss is -$24, which is much smaller than the loss incurred if they were to shutdown. If they were to shutdown, the loss would equal the fixed costs or -$84.50. However, the firm should shutdown once the price goes above average variable costs.

C.   Yes, due to the fact that the shutdown loss is -$169.  This is much smaller than the operating loss.

D.   No, due to the fact that the operating loss is -$48, which is much smaller than the loss incurred if they were to shutdown. If they were to shutdown, the loss would equal the fixed costs or -$169.

A.   Once fixed costs decrease, or the ATC curve shifts downwards.

B.   If price was equal to, or went above AVC.

C.   Once fixed costs increase, or the ATC curve shifts upwards.

D.   If price was equal to, or went below AVC.

A.   Continue to produce in the short run but shut down in the long run.

B.   Continue to produce in both the short run and the long run.

C.   Shut down immediately.

D.   Shut down in the short run but continue production in the long run.

A.   The firm will raise the price above P0 to increase profit.

B.   This market is in long-run equilibrium because the firm is earning positive economic profit.

C.   This market is in long-run equilibrium because the firm is earning zero economic profit.

D.   This market is in short-run equilibrium but not long-run equilibrium.

A.   Firm shown in the graph will produce q1, but all the firms in the market will produce a total of Q1.

B.   Firm is not producing at the output where profit is maximized.

C.   Output of the firm shown in the graph is the same as quantity supplied in the market.

D.   Firm shown in the graph will produce q0, but all the firms in the market will produce a total of Q0.

A.   Market price remains at P0 because perfectly competitive firms can't earn positive economic profit.

B.   Market price rises from P0 to P1 and the firm's output rises from Q0 to Q1.

C.   The firm's output remains at q0 because perfectly competitive firms can't earn positive economic profit.

D.   Market price rises from P0 to P1 and the firm's output rises from q0 to q1.

A.   New firms will enter this market and price will remain at P1.

B.   New firms will enter this market and price will return to P0.

C.   Some firms will exit this market and price will remain at P1.

D.   Some firms will exit this market and price will return to P0.

A.   Some firms will exit this market and the price will return to P0.

B.   New firms will enter this market and the price will return to P0.

C.   Some firms will exit this market and the price will remain at P1.

D.   New firms will enter this market and the price will remain at P1.