Other Economics Answers

• A perfectly competitive firm is described as a market with A. a few buyers, many sellers and the production of differentiated goods.
•  B. many buyers, many sellers and the production of homogenous goods.
•  C. a few firms producing differentiated goods.
•  D. a large number of firms that each individually sets the price of their goods.

• Which one of the following statements is incorrect? Under perfect competition A. firms may earn normal profit in the short run.
•  B. firms may suffer economic losses in the short run.
•  C. firms may earn economic profits in the short run.
•  D. firms may earn an economic profit in the long run.

A profit-maximising firm sells its product for R300, but continues to produce even though it is making a loss. This suggests that

A. the average fixed cost is less than the price.

B. the average total cost is less than the price.

C. the average variable cost is less than the price.

D. the marginal cost is less than the price.

A firm's marginal revenue (MR)

•  A. is equal to the total revenue divided by the quantity sold.
•  B. is equal to ΔTR/ΔQ.
•  C. is equal to (TR – TC)/Q.
•  D. is equal to the price of its product multiplied by the quantity sold.

Which one of the following statements is incorrect? Under perfect competition

A. marginal revenue is always equal to the price of the product.

B. average revenue is always equal to the price of the product.

C. marginal revenue is always equal to marginal cost.

D. average revenue is always equal to marginal revenue.

In a perfectly competitive market,

A. each participant is too small to affect the market price.

B. there can be few or many buyers and sellers.

C. the price can be driven upward by suppliers holding back on goods and services.

D. government intervention is needed to ensure that prices are fair for consumers.

• A monopoly is a A. small group of producers with similar products.
•  B. single seller of a product that has no close substitutes.
•  C. large number of producers each with a small share of the total market output.
•  D. single buyer of raw materials.

Harry Mole aged 44. During the current year of assessment, she earned a Salary of R350 000 and a dividend of R3 200. You are required to calculate the final tax liability.