UNT Econ 1100 test
if firms in the market for yogurt are earning positive economic profit in the short run, and
there are no barriers to entry into this market, economic theory predicts that: - correct
answer-new entrants into the market will drive down the price of yogurt in the long run
firms operating in perfectly competitive markets - correct answer-have no market power and
are price takers
the profit-maximizing firm is: - correct answer-earning an economic profit of $50 in the short
run
the demand curve for an individual seller in a perfectly competitive market is - correct
answer-horizontal (perfectly elastic) at the market determined price
assumptions of the model of perfect competition - correct answer---firms in the market
produce identical outputs
--the demand curve facing the firm is perfectly elastic
--the market consists of a large number of buyers and sellers
downward-sloping LRAC curve implies: - correct answer-firms in the market produce
identical outputs
TFC - correct answer-costs that must be paid in the short run even when no output is
produced
marginal cost - correct answer-change in total cost resulting from producing one more unit of
output
following statements are correct: - correct answer---MP eventually falls in the short run
--AP rises when MP is greater than AP
--AP falls when MP is less than AP
in the short run, firms: - correct answer-have at least one fixed output
gov. policy can promote the efficient use of common resources by: - correct
answer-converting them into private goods with clearly defined property rights
coase theorem: - correct answer-property rights are clearly defined and transaction costs are
sufficiently low
Pos. Extern= unregulated markets result in a level of output that is _____ than the socially
efficient level because the private benefits are ____ than the social benefits - correct
answer-lower; less
if firms in the market for yogurt are earning positive economic profit in the short run, and
there are no barriers to entry into this market, economic theory predicts that: - correct
answer-new entrants into the market will drive down the price of yogurt in the long run
firms operating in perfectly competitive markets - correct answer-have no market power and
are price takers
the profit-maximizing firm is: - correct answer-earning an economic profit of $50 in the short
run
the demand curve for an individual seller in a perfectly competitive market is - correct
answer-horizontal (perfectly elastic) at the market determined price
assumptions of the model of perfect competition - correct answer---firms in the market
produce identical outputs
--the demand curve facing the firm is perfectly elastic
--the market consists of a large number of buyers and sellers
downward-sloping LRAC curve implies: - correct answer-firms in the market produce
identical outputs
TFC - correct answer-costs that must be paid in the short run even when no output is
produced
marginal cost - correct answer-change in total cost resulting from producing one more unit of
output
following statements are correct: - correct answer---MP eventually falls in the short run
--AP rises when MP is greater than AP
--AP falls when MP is less than AP
in the short run, firms: - correct answer-have at least one fixed output
gov. policy can promote the efficient use of common resources by: - correct
answer-converting them into private goods with clearly defined property rights
coase theorem: - correct answer-property rights are clearly defined and transaction costs are
sufficiently low
Pos. Extern= unregulated markets result in a level of output that is _____ than the socially
efficient level because the private benefits are ____ than the social benefits - correct
answer-lower; less
