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Macroeconomics 15th Canadian Edition By Christopher T.S. Ragan – Test Bank

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  • ISBN-10 ‏ : ‎ 013391044X
  • ISBN-13 ‏ : ‎ 978-0133910445

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SKU:tb1002324

Macroeconomics 15th Canadian Edition By Christopher T.S. Ragan – Test Bank

Economics – Canadian Edition, 15e (Ragan)
Chapter 9 Competitive Markets

9.1 Market Structure and Firm Behaviour

1) Which of the following is NOT a determinant of market structure?
A) The number of sellers.
B) The nature of the product.
C) The ease of entering the industry.
D) The capital-labour ratio of the firm.
E) The market share of the sellers.
Answer: D
Diff: 1
Topic: 9.1. competitive market structure
Skill: Recall
Learning Obj.: 9-1 Explain the difference between competitive behaviour and a competitive market.
User2: Qualitative

2) The term “perfect competition” refers to
A) rivalrous behaviour.
B) ideal economic behaviour.
C) a type of market structure.
D) the most prevalent market structure in a capitalist economy.
E) the most realistic market structure.
Answer: C
Diff: 1
Topic: 9.1. competitive market structure
Skill: Recall
Learning Obj.: 9-1 Explain the difference between competitive behaviour and a competitive market.
User2: Qualitative

3) In economics, perfect competition refers to a market structure where
A) firms behave strategically.
B) all firms are earning profits.
C) firms co-operate with each other.
D) each firm has zero market power.
E) firms can set the price of their product.
Answer: D
Diff: 1
Topic: 9.1. competitive market structure
Skill: Recall
Learning Obj.: 9-1 Explain the difference between competitive behaviour and a competitive market.
User2: Qualitative

4) A firm is said to have “market power” only when
A) it has the ability to influence the price of its product.
B) it has the ability to choose its own profit-maximizing level of output.
C) its demand curve is the market demand curve.
D) it is one of 10 or fewer firms in the industry.
E) it is one of 25 or fewer firms in the industry.
Answer: A
Diff: 1
Topic: 9.1. competitive market structure
Skill: Recall
Learning Obj.: 9-1 Explain the difference between competitive behaviour and a competitive market.
User2: Qualitative

9.2 The Theory of Perfect Competition

1) The theory of perfect competition is built on several assumptions, including that
A) the individual firm can affect the price of the product it sells.
B) the individual firm can influence demand by advertising.
C) each firm must earn economic profits to remain in the industry.
D) any firm can easily enter or leave the industry.
E) there are few producers of an identical product.
Answer: D
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Recall
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

2) An example of a product that could most closely satisfy the homogeneous product assumption of perfect competition is
A) barley.
B) cars.
C) shampoo.
D) personal computers.
E) pizza.
Answer: A
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Applied
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

3) Which of the following statements does NOT apply to a perfectly competitive market?
A) There is freedom of entry and exit of firms in the industry.
B) Consumers can shop for the lowest available price.
C) Consumers prefer certain brands over others.
D) All firms have realized the possible economies of scale.
E) All firms in the industry are price takers.
Answer: C
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Applied
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

4) If a firm in a perfectly competitive market were to raise its price, its
A) revenue would decrease only if market demand were elastic.
B) revenue would increase only if market demand were inelastic.
C) total costs would increase.
D) revenue would fall dramatically.
E) profits would increase as long as costs remained constant.
Answer: D
Diff: 2
Topic: 9.2a. assumptions of perfect competition
Skill: Applied
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

5) Given the usual assumptions about perfect competition, a perfectly competitive firm
A) can set the price it charges.
B) can sell as much of its product as it wishes at the market price.
C) can affect the market conditions in a significant way.
D) is aware of its competitors’ costs.
E) competes actively with other sellers in the industry.
Answer: B
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Recall
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

6) A firm in a perfectly competitive market
A) has no power to influence the market price.
B) is limited in the amount of product it can sell without affecting the price.
C) is dependant upon the behaviour of its competitors.
D) is aware of its competitors’ costs.
E) competes actively with other sellers in the industry.
Answer: A
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Recall
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative
7) The conditions for a perfectly competitive market include which one of the following?
A) Firms behave as price takers.
B) Profits are zero in the short run.
C) New entrants cannot threaten the position of existing firms.
D) Firms can control prices.
E) Firms must employ the newest technologies as soon as they are developed.
Answer: A
Diff: 1
Topic: 9.2a. assumptions of perfect competition
Skill: Recall
Learning Obj.: 9-2 List the four key assumptions of the theory of perfect competition.
User2: Qualitative

 

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