Tackle the Test: Multiple-Choice Questions

1. Question

   In the long run, a perfectly competitive firm will earn

   A.

   a negative market return.

   B.

   a positive profit.

   C.

   a loss.

   D.

   a normal profit.

   E.

   excess profit.

   In the long run, a perfectly competitive firm will earn

2. Question

   With perfect competition, efficiency is generally attained in

   A.

   the short run but not the long run.

   B.

   the long run but not the short run.

   C.

   both the short run and the long run.

   D.

   neither the short run nor the long run.

   E.

   specific firms only.

   With perfect competition, efficiency is generally attained in

3. Question

   Compared to the short-run industry supply curve, the long-run industry supply curve will be more

   A.

   elastic.

   B.

   inelastic.

   C.

   steeply sloped.

   D.

   profitable.

   E.

   accurate.

   Compared to the shor
4. Page 613

   Question

   Which of the following is generally true for perfect competition?

   
   

   
   

   1. There is free entry and exit.

      
      
   
   

   2. Long-run market equilibrium is efficient.

      
      
   
   

   3. Firms maximize profit at the output level where P = MC.

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and II only

   E.

   I, II, and III

   Which of the following is generally true for perfect competition?

5. Question

   Which of the following will happen in response if perfectly competitive firms are earning positive economic profit?

   A.

   Firms will exit the industry.

   B.

   The short-run industry supply curve will shift right.

   C.

   The short-run industry supply curve will shift left.

   D.

   Firm output will increase.

   E.

   Market price will increase.

   Which of the following will happen in response if perfectly competitive firms are earning positive economic profit?