Microeconomics Full-Length Practice Test 2Microeconomics Full-Length
Practice Test 2
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Questions 16 and 17 refer to the following graph.
QPMCATCAVCLMN15. All of the following will cause a shift in the
demand curve except:
A. Price of substitute increase
B. Preferences change
C. Advertising is increased
D. Price of the good decreases
E. Number of buyers in the market increase16. The graph above represents the cost curves of a
firm in a competitive market. What does the
distance between L and M represent?
A. Total cost of all production
B. Total economic profit
C. Total profit
D. Additional cost accrued in the long run
E. Additional cost accrued for the short run- All of the following is true for a firm in a
competitive market except?
A. The level of production is derived from the
intersection of MC and AVC.
B. The level of production is derived from the
intersection of MC and ATC.
C. The distance between ATC and ATV, or line
MN, is fixed cost.
D. MC is the cost of producing one additional
unit of output.
E. ATC is the average fixed cost per unit plus
the average variable cost per unit.
18. Which of the following is true in a perfectly
competitive market?
A. Many firms producing many products
B. Few firms producing one type of product
C. One firm producing one product
D. Many firms producing one product
E. Few firms producing many types of products19. Assume there are positive economic profits in a
competitive market. Which of the following best
describes the future of this market?
A. Firms would become efficient because they
would produce more goods for the higher
price.
B. Firms would maintain their normal
production levels to take advantage of the
economic profits.
C. New firms will enter the market to take
advantage of the economic profits.
D. Some firms will exit the market because
there is no incentive for real profits.
E. New firms will enter the market until the
economic profit equals zero.