Question : 11) Both individual buyers and sellers in perfect competition A) can : 1387777

11) Both individual buyers and sellers in perfect competition

A) can influence the market price by their own individual actions.

B) can influence the market price by joining with a few of their competitors.

C) have to take the market price as a given.

D) have the market price dictated to them by government.

12) Both buyers and sellers are price takers in a perfectly competitive market because

A) the price is determined by government intervention and dictated to buyers and sellers.

B) each buyer and seller knows it is illegal to conspire to affect price.

C) both buyers and sellers in a perfectly competitive market are concerned for the welfare of others.

D) each buyer and seller is too small relative to others to independently affect the market price.

13) Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges $21. Which of the following will happen?

A) The firm’s profits will increase.

B) The firm’s revenue will increase.

C) The firm will not sell any output.

D) The firm will sell more output than its competitors.

14) The demand curve for each seller’s product in perfect competition is horizontal at the market price because

A) each seller is too small to affect market price.

B) the price is set by the government.

C) all the sellers get together and set the price.

D) all the demanders get together and set the price.

15) An individual seller in perfect competition will not sell at a price lower than the market price because

A) demand for the product will exceed supply.

B) the seller would start a price war.

C) the seller can sell any quantity she wants at the prevailing market price.

D) demand is perfectly inelastic.

16) Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price?

A) He would lose some but not all his customers.

B) Initially, his customers might complain but over time they will come to accept the new rate.

C) If Jason raises his price, he would lose all his customers.

D) If Jason raises his price, then all others supplying the same service will also raise their prices.

17) The demand curve for an individual seller’s product in perfect competition is

A) the same as market demand.

B) downward sloping.

C) vertical.

D) horizontal.

18) In perfect competition

A) the market demand curve and the individual’s demand are identical.

B) the market demand curve is perfectly inelastic while demand for an individual seller’s product is perfectly elastic.

C) the market demand curve is perfectly elastic while demand for an individual seller’s product is perfectly inelastic.

D) the market demand curve is downward sloping while demand for an individual seller’s product is perfectly elastic.

19) Which of the following arguments could be made as evidence that the market for produce sold at a farmers’ market is perfectly competitive?

A) The U.S. Department of Agriculture has established standards for the labeling of organic produce sold at farmers’ markets.

B) Sales of organically grown food have increased at a rate of 20 percent per year.

C) As more farmers began selling their products at farmers’ markets, the increase in supply has driven down prices to the point where they just cover the cost of production.

D) The profits earned by farmers who sell their products at farmers’ markets have continued to grow, despite the increasing number of farmers entering this market.

20) Which of the following characteristics of a farmers’ market make it a good example of a perfectly competitive market?

A) Selling product at a farmers’ market was very profitable for farmers in the early 2000s. As result, many farmers sold their farms to larger firms.

B) Farmers who sell product at a farmers’ market are similar to other entrepreneurs who introduce products that earn short-run profits but invite competition that drives down prices and profits in the long run.

C) Farmers who sell product at a farmers’ market are similar to other business owners who take advantage of the willingness of some consumers to pay high prices for new and different products.

D) Farmers selling product at a farmers’ market provide a product that is a necessity, rather than a luxury.