QUIZ 2 for chapter 8 : 3. Suppose that the firms in the perfectly competitive oat industry currently are receiving a pri

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QUIZ 2 for chapter 8 :
3. Suppose that the firms in the perfectly competitive oatindustry currently are receiving a price of $2 per bushel for theirproduct. The minimum possible average total cost of producing oatsin the long run is $1 per bushel. It follows that:
a. the price of oats will remain at $2 per bushel in the longrun.
b. the oat industry is in equilibrium.
c. new firms will enter the oat industry.
d. firms in the oat industry will earn economic profits in boththe long run and the short run.
7. The market demand curve for a product produced in a perfectlycompetitive industry is normally: Group of answer choices
a. downward sloping.
b. a vertical line.
c. a horizontal line.
d. upward sloping.
10. What is a firm's breakeven price?
a. Any market price
b. The minimum AVC
c. The minimum ATC
d. The minimum AFC
assignment 2
6. Which of the following is a quota?
a. limits on the number of bushels of clams that can be caughtin New Jersey
b. property taxes on beachfront property
c. the maximum reimbursement that insurance will pay for amedical procedure
d. rent controls in New York City
7. Suppose the Ethiopian government sets coffee prices at$3 per pound. The market price, however, is $6 per pound. The government'sactions will:
a. improve equality between rich and poor, since the poor cannow afford coffee.
b. improve efficiency, since the low prices will force producersto find cheaper production methods.
c. result in coffee surpluses
d. cause coffee shortages
11. A community college creates _____ for a community.
a. positive externalities
b. negative externalities
c. a tragedy of the commons
d. a common property resource market failure