ECON 2102 Test 3 Questions and Answers Already Passed Latest Update 2025-2026
A perfectly competitive market results in efficiency because...
A. Price is driven down to minimum ATC.
B. Price rises high enough to equal marginal cost.
C. Zero economic profit is achieved.
D. MC<P - Answers A
Implicit Costs...
A. Include only payments to workers and lenders.
B. Represent actual monetary payments made for resources used to produce a good such as oil.
C. Are the costs to produce a good or service for which no direct payment is made.
D. Are the total opportunity costs of resources and inputs used to produce a good. - Answers C
Marginal cost is the increase in total cost associated with a one-unit...
A. Increase in production.
B. Decrease in production.
C. Increase in input usage.
D. Decrease in input usage. - Answers A
The long run is...
A. A period longer than one year.
B. The period required to produce a unit of the firm's output.
C. A period long enough for all inputs to be variable.
D. Approximately one year. - Answers C
High profits in a particular industry indicate that...
A. Consumers want less of that industry's goods.
B. Consumers are satisfied with the level of production of that industry's goods.
C. Consumers want more of that industry's goods.
, D. Producers are satisfied with the level of production of that industry's goods. - Answers C
In a perfectly competitive industry, economic profit...
A. Can persist in the long run because of barriers to entry.
B. Can persist in the long run because of homogeneous products.
C. Will always be negative in the long run because of ease of entry.
D. Will approach zero in the long run as more firms enter the market. - Answers D
The decision to start or expand a business is known as the...
A. Output decision.
B. Investment decision.
C. Production decision.
D. Profit maximization decision. - Answers B
A perfectly competitive firm should expand output when...
A. P<ATC
B. P>ATC
C. P<MC
D. P>MC - Answers D
Profit...
A. Is the difference between total revenue and total cost.
B. Is the difference between variable costs and fixed costs.
C. Is always a number greater than zero.
D. Must be reported to Wall Street quarterly. - Answers A
The market supply curve in a perfectly competitive market is usually...
A. Downward-sloping.
B. Horizontal.
C. Vertical.
A perfectly competitive market results in efficiency because...
A. Price is driven down to minimum ATC.
B. Price rises high enough to equal marginal cost.
C. Zero economic profit is achieved.
D. MC<P - Answers A
Implicit Costs...
A. Include only payments to workers and lenders.
B. Represent actual monetary payments made for resources used to produce a good such as oil.
C. Are the costs to produce a good or service for which no direct payment is made.
D. Are the total opportunity costs of resources and inputs used to produce a good. - Answers C
Marginal cost is the increase in total cost associated with a one-unit...
A. Increase in production.
B. Decrease in production.
C. Increase in input usage.
D. Decrease in input usage. - Answers A
The long run is...
A. A period longer than one year.
B. The period required to produce a unit of the firm's output.
C. A period long enough for all inputs to be variable.
D. Approximately one year. - Answers C
High profits in a particular industry indicate that...
A. Consumers want less of that industry's goods.
B. Consumers are satisfied with the level of production of that industry's goods.
C. Consumers want more of that industry's goods.
, D. Producers are satisfied with the level of production of that industry's goods. - Answers C
In a perfectly competitive industry, economic profit...
A. Can persist in the long run because of barriers to entry.
B. Can persist in the long run because of homogeneous products.
C. Will always be negative in the long run because of ease of entry.
D. Will approach zero in the long run as more firms enter the market. - Answers D
The decision to start or expand a business is known as the...
A. Output decision.
B. Investment decision.
C. Production decision.
D. Profit maximization decision. - Answers B
A perfectly competitive firm should expand output when...
A. P<ATC
B. P>ATC
C. P<MC
D. P>MC - Answers D
Profit...
A. Is the difference between total revenue and total cost.
B. Is the difference between variable costs and fixed costs.
C. Is always a number greater than zero.
D. Must be reported to Wall Street quarterly. - Answers A
The market supply curve in a perfectly competitive market is usually...
A. Downward-sloping.
B. Horizontal.
C. Vertical.
