Two versions

Question 1 In the long run, if a firm is making a loss, it will:

Question 2 Refer to the accompanying figure. This firm's short­run supply curve is represented by the:

Question 3 In competitive markets:

Question 4 Jim and Lisa own a dog­grooming business in Champlain, New York, called JL Groomers. There are many buyers and many sellers in the dog­grooming service market. JL Groomers experiences normal cost curves, with the marginal cost (MC) curve crossing average variable cost (AVC) at $14 and average total cost (ATC) at $22. JL Groomers will always shut down if the market price is:

Question 5 Dave's Batting Cages is located in Boston, Massachusetts. During the first year of operation, Dave's Batting Cages incurred many costs. In that year, Dave spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Dave took out a loan to open his business, in which he would have earned $1,500, and his previous job, which he could get back at any time, paid him $50,000. Dave's Batting Cages incurred _________ in explicit costs.

Question 6 Refer to the accompanying figure to answer the questions that follow. If the price is $3, the firm is making:

Question 7 A firm's willingness to supply its product in the long run is represented on a graph by the:

Question 8 The accompanying table represents the quantity produced, the total revenue, and the total cost of a firm operating in a perfectly competitive market. Refer to this table to answer the questions that follow. Profits are maximized when producing:

Question 9 Firms will be indifferent about shutting down or producing if the price they charge is:

Question 10 The accompanying table represents the quantity produced, the total revenue, and the total cost of a firm operating in a perfectly competitive market. Refer to this table to answer the questions that follow. When profits are maximized, profits are equal to:

Question 11 If firms in a competitive market are making positive economic profits, you would expect firms to:

Question 12 A firm will shut down in the long­run if the:

Question 13 Which of the following lists the three main characteristics of a competitive market?

Question 14 Refer to the accompanying figure. A firm would be suffering a loss but still be producing if the price is:

Question 15 Charlie's Churros is a perfectly competitive firm that sells desserts in Houston, Texas. Charlie's Churros currently is taking in $40,000 in revenues, and has $15,000 in explicit costs and $25,000 in implicit costs. Charlie's Churros' accounting profits are:

Question 16 Tom's Campgrounds is a firm conducting business in a competitive market. Tom realizes he is making a loss and is trying to decide whether to shut down or stay open. He should stay open:

Question 17 If Dirk's Doughnuts is a perfectly competitive firm and is currently incurring economic losses of $500:

Question 18 One reason why the long­run supply curve may slope upward in a competitive market is that:

Question 19 If Nicole's Knick­Knacks is a perfectly competitive firm and is making zero economic profits:

Question 20 Refer to the accompanying set of graphs to answer the questions that follow. Which graph would result in firms exiting a perfectly competitive market in the long run?

Version B

Question 1 In a competitive market, if one firm raises its price relative to the other firms in the market, consumers are willing to go to another firm because:

Question 2 Refer to the accompanying table. A firm participating in a competitive market with these costs would be indifferent about producing or shutting down if the price is:

Question 3 Refer to the accompanying figure. Point _________ corresponds to the profit­maximizing quantity that a competitive firm would produce.

Question 4 Refer to the accompanying figure. A firm would be suffering a loss but still be producing if the price is:

Question 5 Refer to the accompanying table. A firm participating in a competitive market with these costs would be making a profit if the price is:

Question 6 The city of Tustin, California, has spent $10 million on a project to build a new community college. It will cost the city $40 million to finish the project. When making the decision to continue the project, the city's chief economist tells the city council to ignore the $10 million because:

Question 7 A firm's willingness to supply its product in the short run is represented on a graph by the:

Question 8 A firm's short­run supply curve is equal to the firm's:

Question 9 Refer to the accompanying figure to answer the questions that follow. If the price is $3, the firm is making:

Question 10 When talking about economic profits in a perfectly competitive market, the difference between the long run and the short run is that, in the short run, firms:

Question 11 Dave's Batting Cages is located in Boston, Massachusetts. During the first year of operation, Dave's Batting Cages incurred many costs. In that year, Dave spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Dave took out a loan to open his business, in which he would have earned $1,500, and his previous job, which he could get back at any time, paid him $50,000. Dave's Batting Cages incurred _________ in explicit costs.

Question 12 Refer to the accompanying figure. A firm would be making positive profits if the price is:

Question 13 All firms, no matter what type of firm structure they are producing in, make their production decisions based on the point where their:

Question 14 A firm characterized as a price­taker:

Question 15 A good economist will ignore _________ and focus on _________ when it comes to making the right decisions.

Question 16 The accompanying table represents the quantity produced, the total revenue, and the total cost of a firm operating in a perfectly competitive market. Refer to this table to answer the questions that follow. Profits are maximized when producing:

Question 17 Because of market forces, firms have _________ when competition is widespread.

Question 18 A farmer's market is close to being a perfectly competitive market. Which characteristic of a perfectly competitive market do most farmer's markets violate?

Question 19 The University of California at Irvine (UCI) allows student organizations and private firms to sell items on campus to raise funds for various activities. Many of the organizations sell boba, a Taiwanese tea drink, because boba is popular with students. The market for boba on the UCI campus is very competitive. If legislation is passed to restrict the entry of private firms into the boba market at the UCI campus, the

Question 20 According to the accompanying figure, the longrun market supply curve would be a horizontal line: