Started on Thursday, 12 October 2023, 3:13 PM
State Finished
Completed on Thursday, 12 October 2023, 3:22 PM
Time taken 9 mins 6 secs
Marks 28.00/30.00
Grade 93.33 out of 100.00
Question 1
Complete
M ark 2.00 out of 2.00
All government intervention in Perfect Competition cause deadweight loss.
Select one:
True
False
Question 2
Complete
M ark 2.00 out of 2.00
Thabang is willing to pay R20 for essay editing, and Tshego is willing to edit essays for R10. The perfect competitive market price for
editting is R14. Calcuate total surplus.
a. R9
b. R11
c. R5
d. R10
Question 3
Complete
M ark 2.00 out of 2.00
Which of the following statements regarding a firm that is a price-taker is FALSE?
a. The firm’s demand curve is downward sloping.
b. The firm’s demand curve is horizontal but the market demand curve is downward sloping.
c. The firm would not sell anything if it sets its price higher than the market price.
d. The firm will sell its product at the going market price.
,Question 4
Complete
M ark 2.00 out of 2.00
If MC is greater than AC, AC must be decreasing in Q. Therefore, we have economies of scale.
Select one:
True
False
Question 5
Complete
M ark 2.00 out of 2.00
What happens in a perfectly competitive industry when economic profit is greater than zero in the long run?
a. New firms may enter the industry.
b. There may be pressure on prices to fall.
c. Existing firms may get larger.
d. Firms may move along their LRAC curves to new outputs.
Question 6
Complete
M ark 2.00 out of 2.00
The burden of a tax and the benefits of a subsidy depend on the elasticities of demand and supply.
Select one:
True
False
Question 7
Complete
M ark 2.00 out of 2.00
A firm’s average fixed cost is R20 if it produces six units of output. If it produces four units, its average fixed cost will be …
a. R30.
b. R15.
c. R20.
d. R18.
,Question 8
Complete
M ark 2.00 out of 2.00
Short-run equilibrium is efficient because at that point …
a. accounting profits will exist but economic profits will be zero.
b. all firms that are operating will be covering their fixed cost.
c. the benefit from the last unit produced is exactly equal to the cost of producing that unit of output.
d. the price will always equal the average cost of production.
Question 9
Complete
M ark 0.00 out of 2.00
The market supply curves and market demand curves for books are given as follows:
Supply curve: P = 0.000002Q Demand curve: P = 11 – 0.00002Q
The short-run marginal cost curve: MC = 0.1 + 0.0009Q
At the short-run equilibrium level, the firm is …
a. making a profit of R1 000 000
b. given the information provided, it cannot be determined.
c. making a loss of R1 000 000
d. making zero economic profit
Question 10
Complete
M ark 2.00 out of 2.00
In an unregulated, competitive market, producer surplus exists because some ...
a. producers are willing to sell at less than the equilibrium price.
b. producers are willing to take more than the equilibrium price.
c. consumers are willing to pay more than the equilibrium price.
d. consumers are willing to purchase, but only at prices below the equilibrium price.
Question 11
Complete
M ark 2.00 out of 2.00
Consumers are made better off when demand is relatively inelastic and supply is relatively elastic
Select one:
True
False
, Question 12
Complete
M ark 2.00 out of 2.00
A price ceiling usually result in a deadweight loss.
Select one:
True
False
Question 13
Complete
M ark 2.00 out of 2.00
Suppose the competitive market is currently in equilibrium. If government imposes a price control, we would expect the consumer surplus to
__________ and the producer surplus to __________.
a. fall; fall
b. rise; rise
c. rise; fall
d. fall; rise
Question 14
Complete
M ark 2.00 out of 2.00
Production Quotas encourages the quantity supplied of any good.
Select one:
True
False
Question 15
Complete
M ark 2.00 out of 2.00
A firm producing six units of output has an average total cost of R200 and has to pay R300 to its fixed factors of production. The average
variable cost is …
a. R200.
b. R150.
c. R50.
d. R300.
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