1) Which of the following markets is closest to a perfectly competitive structure?

Sugar

Computers

Automobiles

Health drinks

2) From a buyer’s point of view, if the seller of a good charges a price which exceeds the competitive equilibrium level in the short run, then:

the seller will not be able to sell anything.

the amount of the good purchased from the seller will be less.

the buyer will perceive an inelastic supply curve.

the seller will earn zero economic profit.

3) When, in the long run, all firms in a perfectly competitive market structure use the same production technique, then:

the average total costs will be falling for all the firms.

the economic profits will be zero for all the firms.

the marginal costs will be zero for all the firms.

the average fixed costs will be constant for all the firms.

4) If the price level of a good declines, then in the short run:

the quantity supplied will fall.

the market demand curve will shift to the left.

the quantity demanded will decline.

the market supply curve will shift to the left.

5) If the market price suddenly deviates away from the equilibrium level due to some reason, the sellers either increase or decrease their output levels accordingly and the market again moves toward equilibrium. This phenomenon is explained by:

the invisible hand mechanism.

the theory of supply.

the law of diminishing marginal utility.

the theory of demand.

6) The only difference between a perfectly competitive market structure and a monopolistically competitive market structure is based on:

the entry and exit barriers.

the long-run profits.

the types of goods being sold.

the mobility of factors of production.

7) The cost leadership strategy emphasizes:

the long-run economic profits.

the number of buyers in the market.

the diseconomies of scale.

the increasing marginal utility of the buyers.