Final Exam Test Student's Full Name: PART 1. Multiple-choice questions (5 mark for each question) 1) In economics, perfect competition refers to a market structure where Al firms behave strategically. B) enter or exit the market is very costly. () firms co operate with each other, D) each firm has zero market power. 2) Farmer Anna is producing tomatoes in a perfectly competitive market. In Year 1 she sells 4000 bushels of tomatoes at a price of $12.00 each. In Year 2 she sells 4800 bushels at $13,00 each, In Year 2, her average revenue is and her marginal revenue is A) $13,00, $1,00 B) $12.50, $12.50 C) $12,00, $12.00 D) $13,00, $13.00 3) A firm in a perfectly competitive industry will maximize profits by adjusting A) price until marginal revenue equals marginal cost B) output until marginal cost equals marginal revenue. C) price until average revenue equals average total cost D) output until average revenue equals short-run average total cost 4) Suppose that in a perfectly competitive industry, the market price of the product is $6. A firm is producing the output level at which average total cost equals marginal cost, both of which are $8. Average variable cost is $4. To maximize its profits in the short run, the firm should A) reduce its output B) expand its output. C) leave its output unchanged. D) shut down. 5) The short-run supply curve for a perfectly competitive firm is A) its entire marginal-cost curve. B) its rising portion of the average-variable-cost curve. C) its marginal-cost curve above the average-variable-cost curve. D) its average-revenue curve. 6) If a single-price monopoly is presently producing an output at which marginal revenue is Page 1 of 5