Question : 21) A perfectly competitive wheat farmer in a constant-cost industry : 1245275

21) A perfectly competitive wheat farmer in a constant-cost industry produces 1,000 bushels of wheat at a total cost of $50,000. The prevailing market price is $48. What will happen to the market price of wheat in the long run?

A) The price remains constant at $48.

B) The price falls below $48.

C) The price rises above $48.

D)  There is insufficient information to answer the question.

22) In August 2008, Ethan Nicholas developed the iShoot application for the apple iPhone 3G, and within five months had earned $800,000 from this program. By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales. This example indicates that in a competitive market

A) earning an economic profit in the long run is extremely easy.

B) earning an economic profit in the long run is extremely difficult.

C) it is impossible to earn an economic profit in either the short run or the long run.

D) economic profits are only earned in the long run.

23) Apple introduced its iPhone 3G in July 2008 and within a month sales had topped 3 million units. By April 2009, more than 25,000 apps for the iPhone 3G were available in the iTunes store, an indication that in a competitive market

A) the ease at which a new firm can enter a competitive market is low.

B) the ease at which a new firm can enter a competitive market is high.

C) entry into the market is blocked.

D) entry into the market is restricted in the short run, but becomes easier in the long run.

24) Assume that the tuna fishing industry is perfectly competitive. Which of the following best characterizes the industry if, as demand for tuna increases, fishing boats have to go farther into the ocean to harvest tuna?

A) a constant-cost industry

B) an increasing-cost industry

C) a decreasing-cost industry

D) a fixed-cost industry

25) In the long run, a firm in a perfectly competitive industry will supply output only if its total revenue covers its

A) explicit plus its implicit costs.

B) fixed costs.

C) implicit costs.

D) explicit costs.

26) Which of the following statements is true?

A) A long-run competitive equilibrium can only be achieved in constant-cost industries.

B) When an industry achieves a long-run competitive equilibrium, industry output will not change in the future.

C) A long-run competitive equilibrium outcome is not economically efficient.

D) When an industry reaches a long-run competitive equilibrium, the typical firm in the industry breaks even.

Figure 9-16

27) Refer to Figure 9-16. Which panel best represents the perfectly competitive organic produce market in which some firms are experiencing short-run losses, and consumers are displaying an increased preference for organic produce?

A) Panel A

B) Panel B

C) Panel C

D) Panel D

28) Refer to Figure 9-16. Which panel best represents the perfectly competitive organic produce market’s transition to the long run when some firms in the market are earning economic profits?

A) Panel A

B) Panel B

C) Panel C

D) Panel D

29) Refer to Figure 9-16. Which panel best represents the perfectly competitive organic produce market in which some firms are earning short-run economic profits, and the Surgeon General announces that switching from non-organic produce to organic produce will add 5 years to the average life span of consumers?

A) Panel A

B) Panel B

C) Panel C

D) Panel D

30) Refer to Figure 9-16. Which panel best represents the perfectly competitive organic produce market in which firms are breaking even, economically, organic produce is considered a normal good, and the average income level of consumers is rising?

A) Panel A

B) Panel B

C) Panel C

D) Panel D