Chapter 11 Perfect Competition - Sample Questions
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question
.
1) Perfect competition is an industr
y
with
A) a few firms producing identical goods.
B) man
y
firms producing goods that differ somewhat.
C) a few firms producing goods that differ somewhat in qualit
y
.
D) man
y
firms producing identical goods.
1)
2) In a perfectl
y
competitive industr
y
, there are
A) man
y
bu
y
ers and man
y
sellers.
B) man
y
sellers, but there might be onl
y
one or two bu
y
ers.
C) man
y
bu
y
ers, but there might be onl
y
one or two sellers.
D) one firm that sets the price for the others to follow.
2)
3) In perfect competition, the product of a single firm
A) is sold to different customers at different prices.
B) has man
y
perfect complements produced b
y
other firms.
C) has man
y
perfect substitutes produced b
y
other firms.
D) is sold under man
y
differing brand names.
3)
4) In perfect competition, restrictions on entr
y
into an industr
y
A) do not exist. B) appl
y
to labor but not to capital.
C) appl
y
to both capital and labor. D) appl
y
to capital but not to labor.
4)
5) In perfect competition,
A) there are significant restrictions on entr
y
.
B) each firm can influence the price of the good.
C) there are few bu
y
ers.
D) all firms in the market sell their product at the same price.
5)
6) The price elasticit
y
of demand for an
y
particular perfectl
y
competitive firm's output is
A) less than 1. B) equal to zero. C) infinite. D) 1.
6)
7) The demand for wheat from farm A is perfectl
y
elastic because wheat from farm A is a(n)
A) perfect complement to wheat from farm B. B) perfect substitute for wheat from farm B.
C) normal good. D) inferior good.
7)
8) In perfect competition, the elasticit
y
of demand for the product of a single firm is
A) 0. B) infinite.
C) 1. D)
b
etween 0 and 1.
8)
1
