Economics and Perfectly Competitive Firm
CHAPTER 9—PERFECT COMPETITION HOME WORK
1. Market structure is determined by the
a.
volume of discounts, the quantity of foreign exchange, and the effects of Federal Reserve policy
b.
influence of government policy, the number of qualified buyers, and the effect of generally accepted accounting principles
c.
number of buyers and sellers, whether the product is standardized, whether there is free entry and exit, and how well informed the buyers and sellers are about the market
d.
volume of discounts, the effect of generally accepted accounting principles, and Federal Reserve policy
e.
influence of government policy, the quantity of foreign exchange, and the effects of Federal Reserve policy
2. The number of sellers in a market is considered to be large when
a.
the total exceeds 100
b.
no single buyer can affect the price through his or her demand for the product
c.
they cannot be easily counted
d.
no single seller can affect the price by changing its level of output
e.
no seller controls more than 20 percent of the total market supply
3. Which of the following is not a basic characteristic of a perfectly competitive market?
a.
a large number of buyers and sellers
b.
significant nonprice competition among firms
c.
a standardized product produced by firms
d.
no barriers to entry
e.
no barriers to exit
4. Firms in a perfectly competitive market cannot influence
a.
the quantity of the good that they produce
b.
how much labor to use in production
c.
how much capital to employ in production
d.
the level of advertising that they use
e.
the price of the product they sell
5. Firms are assumed to be price takers in a perfectly competitive market because
a.
they are not allowed by law to charge any price other than the market price
b.
they must accept any price offered by consumers
c.
they earn high enough profits at the market price, so they do not want to hurt consumers by raising their
1. Market structure is determined by the
a.
volume of discounts, the quantity of foreign exchange, and the effects of Federal Reserve policy
b.
influence of government policy, the number of qualified buyers, and the effect of generally accepted accounting principles
c.
number of buyers and sellers, whether the product is standardized, whether there is free entry and exit, and how well informed the buyers and sellers are about the market
d.
volume of discounts, the effect of generally accepted accounting principles, and Federal Reserve policy
e.
influence of government policy, the quantity of foreign exchange, and the effects of Federal Reserve policy
2. The number of sellers in a market is considered to be large when
a.
the total exceeds 100
b.
no single buyer can affect the price through his or her demand for the product
c.
they cannot be easily counted
d.
no single seller can affect the price by changing its level of output
e.
no seller controls more than 20 percent of the total market supply
3. Which of the following is not a basic characteristic of a perfectly competitive market?
a.
a large number of buyers and sellers
b.
significant nonprice competition among firms
c.
a standardized product produced by firms
d.
no barriers to entry
e.
no barriers to exit
4. Firms in a perfectly competitive market cannot influence
a.
the quantity of the good that they produce
b.
how much labor to use in production
c.
how much capital to employ in production
d.
the level of advertising that they use
e.
the price of the product they sell
5. Firms are assumed to be price takers in a perfectly competitive market because
a.
they are not allowed by law to charge any price other than the market price
b.
they must accept any price offered by consumers
c.
they earn high enough profits at the market price, so they do not want to hurt consumers by raising their