ASU HCD 201 FINAL EXAM PREP WITH ALL CORRECT &
VERIFIED ANSWERS (UPDATED TO PASS)
Inputs that cannot be increased or decreased in the short run are called Correct answer-Fixed
input
Which of the following would most likely reach the long run most rapidly?
a. A healthcare provider
B. A power plant
C. A lemonade stand Correct answer-C. A lemonade stand
In order for ASU Pharmacy to sell more units of their patented drug with an elastic demand, they
must: Correct answer-Lower the price of all units
What is true of the MC curve? Correct answer-It intersects both the ATC and the AVC curves at
their minimums
Which of the following would help identify market structure?
a. The number of firms in the industry
b. Type of product in the industry
c. Ease of entry into the industry
d. All of the above Correct answer-d. All of the above
Which of the following is true of a perfectly competitive market structure?
a. Firms experience increasing returns to scale
b. Positive economic profit is possible in the long run
c. Each firm knows the quantity it wants to sell Correct answer-c. Each firm knows the quantity it
wants to sell
Which of the following is likely to be present in a perfectly competitive market?
a. Patents
b. Government licenses
c. Firms producing identical products
d. Economic profits Correct answer-c. Firms producing identical products
True or False? For perfectly competitive firms P=MR=AR Correct answer-True
A firm will continue to operate at a loss in the short-run as long as its: Correct answer-Average
variable costs are at least equal to price per unit
If two perfectly competitive firms in the long-run produce the same quantity at the market price,
then, at that quantity, they must have the same: Correct answer-Marginal cost
Productive efficiency occurs when Correct answer-output is produced at minimum average cost
Suppose that, in the short run, a perfectly competitive firm earns a normal profit. Which of the
following is incorrect?
VERIFIED ANSWERS (UPDATED TO PASS)
Inputs that cannot be increased or decreased in the short run are called Correct answer-Fixed
input
Which of the following would most likely reach the long run most rapidly?
a. A healthcare provider
B. A power plant
C. A lemonade stand Correct answer-C. A lemonade stand
In order for ASU Pharmacy to sell more units of their patented drug with an elastic demand, they
must: Correct answer-Lower the price of all units
What is true of the MC curve? Correct answer-It intersects both the ATC and the AVC curves at
their minimums
Which of the following would help identify market structure?
a. The number of firms in the industry
b. Type of product in the industry
c. Ease of entry into the industry
d. All of the above Correct answer-d. All of the above
Which of the following is true of a perfectly competitive market structure?
a. Firms experience increasing returns to scale
b. Positive economic profit is possible in the long run
c. Each firm knows the quantity it wants to sell Correct answer-c. Each firm knows the quantity it
wants to sell
Which of the following is likely to be present in a perfectly competitive market?
a. Patents
b. Government licenses
c. Firms producing identical products
d. Economic profits Correct answer-c. Firms producing identical products
True or False? For perfectly competitive firms P=MR=AR Correct answer-True
A firm will continue to operate at a loss in the short-run as long as its: Correct answer-Average
variable costs are at least equal to price per unit
If two perfectly competitive firms in the long-run produce the same quantity at the market price,
then, at that quantity, they must have the same: Correct answer-Marginal cost
Productive efficiency occurs when Correct answer-output is produced at minimum average cost
Suppose that, in the short run, a perfectly competitive firm earns a normal profit. Which of the
following is incorrect?
