1. eBay.com is a vast auction site that is similar to a competitive market in some ways but also differs from it in others. Which of the following describes how eBay resembles a competitive market? 

It is easy to enter and easy to leave eBay.
Sellers sometimes do not describe the products accurately on eBay (there is incomplete information).
There is a great variety of different products sold on eBay.
On eBay the large sellers dominate the market.

2. For a monopolist, the price of the product: 
equals the marginal revenue.
is less than the marginal revenue.
exceeds the marginal revenue.
equals the marginal cost.

3. If a perfectly competitive firm finds that price is less than average variable cost it should: 
not adjust output if marginal cost equals price.
shut down immediately.
increase output until price equals marginal cost.
decrease output until price equals marginal cost.

4. For a perfectly competitive firm, the profit-maximizing output level occurs where marginal cost equals price. 
True
False

5. A decrease in the number of firms in a perfectly competitive market causes: 
a movement along the market supply curve.
a decrease in each firm's supply curve.
a decrease in the market supply curve.
an increase in the market supply curve.

6. Charging different prices to different individuals or groups for the same product is called: 
market segmentation.
price differentiation.
quantity discrimination.
price discrimination.

7. A perfectly competitive firm in the long run: 
can earn positive or negative economic profits.
can earn negative accounting profits as long as economic profits are positive.
makes zero economic profits.
makes zero accounting profits.

8. Total profit is maximized at the output level at which the: 
vertical distance between the total revenue curve and the total cost curve is maximized.
total cost and total revenue curves intersect.
area between the total revenue and total cost curves is greatest.
vertical distance between the total revenue and total cost curves is minimized.