Multiple Choice Questions

Consumer and producer surplus will be maximized.
  • Which of the following is an example of creative destruction?
  • Which of the following will not hold true for a competitive firm in long-run equilibrium?
  • Which of the following distinguishes the short run from the long run in pure competition?
  • Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
resource prices remain unchanged as output is increased.
  • Which of the following is an example of creative destruction?
  • A constant-cost industry is one in which:
  • The term allocative efficiency refers to:
  • A decreasing-cost industry is one in which:
Automobile production causes the wagon industry to shut down.
  • Which of the following is an example of creative destruction?
  • Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
  • Which of the following is true concerning purely competitive industries?
  • Which of the following distinguishes the short run from the long run in pure competition?
Firms can enter and exit the market in the long run but not in the short run.
  • Which of the following is true concerning purely competitive industries?
  • Which of the following is an example of creative destruction?
  • Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
  • Which of the following distinguishes the short run from the long run in pure competition?
cannot earn economic profit in the long run.
  • A constant-cost industry is one in which:
  • A decreasing-cost industry is one in which:
  • A purely competitive firm is precluded from making economic profits in the long run because:
  • A purely competitive firm:
input prices fall or technology improves as the industry expands.
  • A constant-cost industry is one in which:
  • The term allocative efficiency refers to:
  • A decreasing-cost industry is one in which:
  • Which of the following is an example of creative destruction?
in both the short run and the long run.
  • The MR = MC rule applies:
  • The term allocative efficiency refers to:
  • Creative destruction is:
  • A purely competitive firm:
often generate short-run economic profits that do not last into the long run.
  • If production is occurring where marginal cost exceeds price, the purely competitive firm will:
  • Which of the following distinguishes the short run from the long run in pure competition?
  • Innovations that lower production costs or create new products:
  • Which of the following is an example of creative destruction?
rise as the industry expands.
  • The process by which new firms and new products replace existing dominant firms and products is called:
  • A purely competitive firm is precluded from making economic profits in the long run because:
  • If the long-run supply curve of a purely competitive industry slopes upward, this implies that the prices of relevant resources:
  • Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then:
should continue producing in the short run but leave the industry in the long run if the situation persists.
  • Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. Given this, the firm:
  • If production is occurring where marginal cost exceeds price, the purely competitive firm will:
  • Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then:
  • Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
the process by which new firms and new products replace existing dominant firms and products.
  • Creative destruction is:
  • A decreasing-cost industry is one in which:
  • The term allocative efficiency refers to:
  • A purely competitive firm:
there is no tendency for the firm's industry to expand or contract.
  • Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. Given this, the firm:
  • Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
  • If the long-run supply curve of a purely competitive industry slopes upward, this implies that the prices of relevant resources:
  • Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then:
of unimpeded entry to the industry.
  • A purely competitive firm:
  • We would expect an industry to expand if firms in that industry are:
  • Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
  • A purely competitive firm is precluded from making economic profits in the long run because:
P equals AFC.
  • Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
  • Which of the following will not hold true for a competitive firm in long-run equilibrium?
  • Which of the following is an example of creative destruction?
  • Which of the following distinguishes the short run from the long run in pure competition?
fail to maximize profit and resources will be overallocated to the product.
  • The primary force encouraging the entry of new firms into a purely competitive industry is:
  • Innovations that lower production costs or create new products:
  • Which of the following distinguishes the short run from the long run in pure competition?
  • If production is occurring where marginal cost exceeds price, the purely competitive firm will:
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Multiple Choice Questions
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