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Competitive Markets in Economics MCQ

1. In the graph above, the point d represents values resulting in ____________.

Inflation

Efficiency

Unemployment

Growth

Answer

Correct Answer: Unemployment

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2. How do shifts in supply affect a constant-cost industry in the long run?

Increase losses

Eliminate profits

Increase profits

Minimize losses

Answer

Correct Answer: Eliminate profits

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3. ______ are factors outside the firm’s control that raise the firm’s costs as industry output expands.

Internal diseconomies of scale

Internal economies of scale

External diseconomies of scale

External economies of scale

Answer

Correct Answer: External diseconomies of scale

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4. In a(n) ______ industry, cost curves do not change as output changes.

Increasing-cost

Decreasing-cost

Constant-cost

Variable-cost

Answer

Correct Answer: Constant-cost

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5. A firm will get a normal return on the use of its resources at economic profits in the run.

High; short

High; long

Zero; short

Zero; long

Answer

Correct Answer: Zero; long

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6. In an expanding market, the market supply curve will ______.

Shift to the right

Shift to the left

Move upward

Move downward

Answer

Correct Answer: Shift to the right

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7. Which of the following will most likely happen if P < ATC?

A firm will shut down in the short run.

A firm will operate in the short run but take a loss.

A firm will exit in the long run.

A firm will operate in the long run and take a profit.

Answer

Correct Answer: A firm will operate in the short run but take a loss.

Note: This Question is unanswered, help us to find answer for this one

8. A graph shows the portion of the marginal costs above the average variable costs for all the firms in the corn market for a period of six months. This graph is a ______.

Short-run market supply curve

Short-run supply curve

Long-run market supply curve

Long-run supply curve

Answer

Correct Answer: Short-run market supply curve

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9. A firm will always shut down when it cannot cover its average ______ costs.

Labor

Marginal

Fixed

Variable

Answer

Correct Answer: Variable

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10. Which of the following shows the equilibrium output that a firm will provide at various prices in the short run?

A short-run marginal cost

A short-run average total cost curve

A short-run supply curve

A short-run demand curve

Answer

Correct Answer: A short-run supply curve

Note: This Question is unanswered, help us to find answer for this one

11. Which of the following is an accurate statement about a firm with zero economic profits?

It will exit the market.

It can cover both its implicit and explicit costs

It will shut down for at least several months.

It can dictate the market price.

Answer

Correct Answer: It can cover both its implicit and explicit costs

Note: This Question is unanswered, help us to find answer for this one

12. What is the term used for the additional income derived from the production of one unit of the good?

Total revenue

Marginal revenue

Average revenue

Allocative revenue

Answer

Correct Answer: Marginal revenue

Note: This Question is unanswered, help us to find answer for this one

13. A firm maximizes profits by maximizing the difference between ______.

Total revenue and total costs

Total supply and total price

Marginal revenue and marginal costs

Marginal supply and marginal price

Answer

Correct Answer: Total revenue and total costs

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14. In a perfectly competitive market, a supplier will have the most difficulty selling his product when his price is ______ the market price.

Slightly lower than

Much lower than

Equal to

Higher than

Answer

Correct Answer: Higher than

Note: This Question is unanswered, help us to find answer for this one

15. Which of the following is an accurate statement about a perfectly competitive market?

It has few barriers for entry, but many for exit.

It has many barriers for entry, but few for exit.

It has few barriers to either entry or exit.

It has many barriers to both entry and exit.

Answer

Correct Answer: It has few barriers to either entry or exit.

Note: This Question is unanswered, help us to find answer for this one

16. In a perfectly competitive market, there are buyers and sellers.

Few; many

Many; few

Few; few

Many; many

Answer

Correct Answer: Many; many

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17. The portion of the MC curve above the AVC curve is called the short-run supply curve.

True

False

Answer

Correct Answer: True

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18. Short-run market curve is the _____ summation of the individual firms’ supply curves in the market

Vertical

Horizontal

Parallel

Perpendicular

Answer

Correct Answer: Horizontal

Note: This Question is unanswered, help us to find answer for this one

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MCQ on Basic Microeconomics	MCQ on Competitive Markets in Economics
MCQ on Consumer Choice Theory	MCQ on Demand, Supply, and Market Equilibrium
MCQ on Eight Powerful Ideas	MCQ on Elasticities in Microeconomics
MCQ on Income, Poverty and Health Care	MCQ on International Finance
MCQ on International Trade	MCQ on Introduction to Microeconomics
MCQ on Market Efficiency and Welfare	MCQ on Market Failure
MCQ on Market in Motion and Price Controls	MCQ on Markets for Labor, Capital, and Land
MCQ on Monopolistic Competition	MCQ on Monopoly and Antitrust
MCQ on Oligopoly and Strategic Behavior	MCQ on Production and Costs
MCQ on Public Finance and Public Choice	MCQ on Scarcity, Trade-Offs, and Production Possibilities
General Microeconomics MCQs

Competitive Markets in Economics MCQ

1. In the graph above, the point d represents values resulting in ____________.

2. How do shifts in supply affect a constant-cost industry in the long run?

3. ______ are factors outside the firm’s control that raise the firm’s costs as industry output expands.

4. In a(n) ______ industry, cost curves do not change as output changes.

5. A firm will get a normal return on the use of its resources at economic profits in the run.

6. In an expanding market, the market supply curve will ______.

7. Which of the following will most likely happen if P < ATC?

8. A graph shows the portion of the marginal costs above the average variable costs for all the firms in the corn market for a period of six months. This graph is a ______.

9. A firm will always shut down when it cannot cover its average ______ costs.

10. Which of the following shows the equilibrium output that a firm will provide at various prices in the short run?

11. Which of the following is an accurate statement about a firm with zero economic profits?

12. What is the term used for the additional income derived from the production of one unit of the good?

13. A firm maximizes profits by maximizing the difference between ______.

14. In a perfectly competitive market, a supplier will have the most difficulty selling his product when his price is ______ the market price.

15. Which of the following is an accurate statement about a perfectly competitive market?

16. In a perfectly competitive market, there are buyers and sellers.

17. The portion of the MC curve above the AVC curve is called the short-run supply curve.

18. Short-run market curve is the _____ summation of the individual firms’ supply curves in the market

19. A firm should always produce at the output where _____ is called the profit-maximizing level of output.

20. When a good is produced at the lowest possible cost ,it is called productive_____.

21. The increase in total revenue resulting from a one-unit increase in sales is _____.

22. An industry where input prices decrease (and cost curves rise) as industry output rises is called increasing-cost industry.

23. An industry where input prices fall (and cost curves fall) as industry output rises, decreasing-cost industry.

24. An industry where input prices (and cost curves) _____ as industry output changes is a constant-cost industry.

25. Total revenue divided by the number of units sold is _____.

26. Allocative efficiency is where ____ and production will be allocated to reflect consumer preferences.

Competitive Markets in Economics MCQ

1. In the graph above, the point d represents values resulting in ____________.

2. How do shifts in supply affect a constant-cost industry in the long run?

3. ______ are factors outside the firm’s control that raise the firm’s costs as industry output expands.

4. In a(n) ______ industry, cost curves do not change as output changes.

5. A firm will get a normal return on the use of its resources at ______ economic profits in the ______ run.

6. In an expanding market, the market supply curve will ______.

7. Which of the following will most likely happen if P < ATC?

8. A graph shows the portion of the marginal costs above the average variable costs for all the firms in the corn market for a period of six months. This graph is a ______.

9. A firm will always shut down when it cannot cover its average ______ costs.

10. Which of the following shows the equilibrium output that a firm will provide at various prices in the short run?

11. Which of the following is an accurate statement about a firm with zero economic profits?

12. What is the term used for the additional income derived from the production of one unit of the good?

13. A firm maximizes profits by maximizing the difference between ______.

14. In a perfectly competitive market, a supplier will have the most difficulty selling his product when his price is ______ the market price.

15. Which of the following is an accurate statement about a perfectly competitive market?

16. In a perfectly competitive market, there are ______ buyers and ______ sellers.

17. The portion of the MC curve above the AVC curve is called the short-run supply curve.

18. Short-run market curve is the _____ summation of the individual firms’ supply curves in the market

19. A firm should always produce at the output where _____ is called the profit-maximizing level of output.

20. When a good is produced at the lowest possible cost ,it is called productive_____.

21. The increase in total revenue resulting from a one-unit increase in sales is _____.

22. An industry where input prices decrease (and cost curves rise) as industry output rises is called increasing-cost industry.

23. An industry where input prices fall (and cost curves fall) as industry output rises, decreasing-cost industry.

24. An industry where input prices (and cost curves) _____ as industry output changes is a constant-cost industry.

25. Total revenue divided by the number of units sold is _____.

26. Allocative efficiency is where ____ and production will be allocated to reflect consumer preferences.

5. A firm will get a normal return on the use of its resources at economic profits in the run.

16. In a perfectly competitive market, there are buyers and sellers.