Category: Economics

In the short run, an increase in demand for a product that is sold in a perfectly competitive market will ……. ?

Select ONE answer:

1. cause more firms to shut down.
2. increase the number of firms in the market.
3. increase the profits of existing firms in the market.
4. have no effect on the price.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

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A firm’s short-run supply curve is the same as ……. ?

Select ONE answer:

1. that portion of its marginal cost curve that lies above average fixed cost.
2. that portion of its marginal cost curve that lies above average total cost.
3. its entire marginal cost curve.
4. that portion of its marginal cost curve that lies above average variable cost.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

This work is licensed under a Creative Commons Attribution 4.0 International License.

In the short run, a perfectly competitive firm’s economic profits ……. ?

Select ONE answer:

1. must be positive.
2. must be negative, that is the firm must incur an economic loss.
3. might be positive, negative (an economic loss), or zero (a normal profit).
4. must equal zero, that is the firm must earn a normal profit.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

John’s Pizza is a perfectly competitive firm. The firm’s costs are shown in the table below.

If the market price is $15, the firm will ……. ?

Select ONE answer:

1. stay in the industry in the long run.
2. shut down.
3. make an economic profit.
4. leave the industry in the long run.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

This work is licensed under a Creative Commons Attribution 4.0 International License.

John’s Pizza is a perfectly competitive firm. The firm’s costs are shown in the table below.

If the market price is £20, how much economic profit does the firm make?

Select ONE answer:

1. £12
2. -£20
3. £0
4. -£10

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

This work is licensed under a Creative Commons Attribution 4.0 International License.