In a competitive industry each buyer and seller ?

Related Mcqs:

1. Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?

   A. Three vases will be sold, and consumer surplus is Rs80
   B. One vase will be sold, and consumer surplus is Rs5.
   C. One vase will be sold, and consumer surplus is Rs30.
   D. Three vases will be sold, and consumer surplus is Rs0.
   E. Two vases will be sold, and consumer surplus is Rs5.

2. Assume That the firms operate as purely competitive sellers (a purely competitive industry) In the long run, equilibrium price equals _________ quantity equals _________ and profits total _________?

   A. $100, 2 million barrels per day $60 million
   B. $80, 4 million barrels per day $70 million
   C. $60, 6 million barrels per day, $20 million
   D. $40, 8 million barrels per day, $0 million

3. A firm in perfectly competitive industry is producing 50 units, its profit-maximising quantity. Industry price is £2 and total fixed costs and total variable cost are £25 and £40 respectively. The firm’s economic profit is ?

   A. £35
   B. £15
   C. £30
   D. £60

4. A buyer’s willingness to pay is that buyer’s ?

   A. minimum amount they are willing to pay for a good
   B. producer surplus.
   C. consumer surplus
   D. maximum amount they are willing to pay for a good
   E. none of these answers

5. Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?

   A. marginal revenue and then use the demand curve to determine the price consistent with this quantity
   B. average total cost and then use the supply curve to determine the price consistent with this quantity
   C. marginal revenue and then use the supply curve to determine the price consistent with this quantity
   D. average total cost and then use the demand curve to determine the price consistent with this quantity

6. Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?

   A. at the efficient scale and charge a price equal to marginal cost
   B. at the efficient scale and charge a price above marginal cost
   C. With excess capacity and charge a price above marginal cost
   D. With excess capacity and charge a price equal to marginal cost

7. If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on ?

   A. how much to spend on advertising?
   B. how much of each input to use?
   C. What price to charge
   D. none of these

8. A firm in a monopolistically competitive industry ?

   A. sells a fixed amount of output regardless of price.
   B. must raise price to sell more output
   C. can sell an infinite amount of output at the market-determined price
   D. must lower price to sell more output.

9. Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?

   A. Pigouvian taxes, command-and-control policies, tradable pollution permits.
   B. tradable pollution permits, Pigouvian taxes, command-and-control policies
   C. tradable pollution permits command-and-control policies, Pigovian taxes.
   D. command-and-control policies, tradable pollution permits, Pigovian taxes.
   E. They would all rank equally high because the same result can be obtained from any one of the policies

10. When an international seller sells a plant equipment or technology to another country and agrees to take payment in the resulting products, it is called?

    A. barter
    B. buy-back
    C. counterpurchase
    D. like-value-exchange