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# Globale Microeconomics

## Quiz 9 :Applying the Competitive Model

Does a competitive long-run equilibrium require cost-minimization?
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You enter a store and buy a bottle of soda. Do you usually receive consumer surplus?
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Sheri is currently purchasing 10 units of a normal good and her indifference curves exhibit diminishing marginal rate of substitution. Suppose there is a decrease in the market price of this good. Then
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What is one reason perfectly competitive firms wish to be ever more efficient?
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Before the DVD, the VCR was a popular format for taping and replaying video. When the DVD was introduced, which of the following most accurately describes the long-run adjustment process in the VCR industry?
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Survivability in a perfectly competitive world requires that
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In the long run, firms in a competitive market make zero economic profit. This induces most firms to leave the industry.
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Firms are ________ with an economic profit of zero, they will ________ in the industry since they ________ be better off in another industry.
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Which of the following characterizes long-run equilibrium in perfect competition?
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Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than$200,000. After some negotiation, Mister Smith purchased the house for $205,000. Smith's consumer surplus is Multiple Choice Answer: Tags Choose question tag Even if two competitive firms in the same market have different production technologies, they will each earn long-run zero profits. Why? Essay Answer: Tags Choose question tag If a firm is in a perfectly competitive world but decides to charge a higher price than its competitors, Multiple Choice Answer: Tags Choose question tag What is one reason firms might lobby to prevent entry into their market? Multiple Choice Answer: Tags Choose question tag A firm that generates zero economic profit usually has Multiple Choice Answer: Tags Choose question tag Long-run economic profit does not exist for fixed factors like land because Multiple Choice Answer: Tags Choose question tag Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop. In the long run, Multiple Choice Answer: Tags Choose question tag In the long run, competitive firms MUST be profit maximizers because if they do not maximize profits, Multiple Choice Answer: Tags Choose question tag The owners of sports franchises often complain that free-agency (open bidding for player services)threatens their profitability and thus their long-run viability. Given your knowledge of perfect competition, which of the following is correct? Multiple Choice Answer: Tags Choose question tag Suppose when a market has four firms, average economic profit is$1,000 per month. When the market has five firms, the average economic profit is -\$50 per month. This suggests that