41.Philsellsduckcallsinaperfectlycompetitivemarket.Ifduckcallssellfor$10eachandaveragetotalcostperunitis $11 at the profit-maximizingoutput level, then in thelong run
a.morefirmswillenterthemarket.
b.somefirmswillexitfromthemarket.
c.the equilibriumpriceperduckcallwillfall.
d.averagetotalcostswillfall.
42.Rogerownsasmallhealthstorethatsellsvitaminsinaperfectlycompetitivemarket.Ifvitaminssellfor$12perbottleandtheaveragetotalcostperbottleis$12.50attheprofit-maximizingoutputlevel,theninthelongrun
a.morefirmswillenterthemarket.
b.somefirmswillexitfromthemarket.
c.theequilibriumpriceperbottlewillfall.
d.averagetotalcostswillfall.
43.Rogerownsasmallhealthstorethatsellsvitaminsinaperfectlycompetitivemarket.Ifvitaminssellfor$12perbottleandtheaveragetotalcostperbottleis$11.50attheprofit-maximizingoutputlevel,theninthelongrun
a.morefirmswillenterthemarket.
b.somefirmswillexitfromthemarket.
c.theequilibriumpriceperbottlewillrise
d.averagetotalcostswillrise.
44.Whenmarketconditionsinacompetitiveindustryaresuchthatfirmscannotcovertheirtotalproductioncosts,then
a.thefirmswillsufferlong-runeconomiclosses.
b.thefirmswillsuffershort-runeconomiclossesthatwillbeexactlyoffsetbylong-runeconomicprofits.
c.somefirmswillexitthemarket,causingpricestoriseuntiltheremainingfirmscancovertheirtotalproductioncosts.
d.allfirmswillgooutofbusiness,sinceconsumerswillnotpaypricesthatenablefirmstocovertheirtotalproductioncosts.
45.Ifoccupationalsafetylawswerechangedsothatfirmsnolongerhadtotakeexpensivestepstomeetregulatoryrequirements,wewouldexpectthat
a.thedemandforproductsinthisindustrywouldincrease.
b.themarketpriceofproductsinthisindustrywoulddecreaseintheshortrunbutnotinthelongrun.
c.thefirmsintheindustrywouldmakealong-runeconomicprofit.
d.competitionwouldforceproducerstopassthelowerproductioncostsontoconsumersinthelongrun.
46.Thetextileindustryiscomposedofalargenumberofsmallfirms.Inrecentyears,thesefirmshavesufferedeconomiclosses,andmanysellershavelefttheindustry.Economictheorysuggeststhattheseconditionswill
a.shiftthedemandcurveoutwardsothatpricewillrisetothelevelofproductioncost.
b.causetheremainingfirmstocolludesothattheycanproducemoreefficiently.
c.causethemarketsupplytodeclineandthepriceoftextilestorise.
d.causefirmsinthetextileindustrytosufferlong-runeconomiclosses.
47.Supposethattheorganic-produceindustryiscomposedofalargenumberofsmallfirms.Inrecentyears,thesefirmshavesufferedeconomiclosses,andmanysellershavelefttheindustry.Economictheorysuggeststhattheseconditionswill
a.shiftthedemandcurveoutwardsothatpricewillrisetothelevelofproductioncost.
b.causetheremainingfirmstocolludesothattheycanproducemoreefficiently.
c.causethemarketsupplytodeclineandthepriceoforganicproducetorise.
d.causefirmsintheorganic-produceindustrytosufferlong-runeconomiclosses.
48.Ifthereisanincreaseinmarketdemandinaperfectlycompetitivemarket,thenintheshortrun
a.therewillbenochangeinthedemandcurvesfacedbyindividualfirmsinthemarket.
b.thedemandcurvesforfirmswillshiftdownward.
c.thedemandcurvesforfirmswillbecomemoreelastic.
d.profitswillrise.
49.Ifthereisanincreaseinmarketdemandinaperfectlycompetitivemarket,thenintheshortrunpriceswill
a.rise.
b.remainunchangedattheminimumofaveragetotalcost.
c.fall.
d.remainunchangedattheminimumofmarginalcost.
50.Whichofthefollowingstatementsisnotcorrect?
a.Inalong-runequilibrium,marginalfirmsmakezeroeconomicprofit.
b.Tomaximizeprofit,firmsshouldproduceatalevelofoutputwherepriceequalsaveragevariablecost.
c.Theamountofgoldintheworldislimited.Therefore,thegoldjewelrymarketprobablyhasalong-runsupplycurvethatisupwardsloping.
d.Long-runsupplycurvesaretypicallymoreelasticthanshort-runsupplycurves.
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