According to Classical economists, economy always remains:

• A) Below full employment level.
• B) Stagnant.
• C) At full employment level.
• D) Above full employment level.

Which market structure is characterized by a kinked demand curve?

• A) Perfect competition
• B) Monopoly
• C) Oligopoly
• D) Monopolistic competition

In superstores, sellers will charge lower prices from customers if they buy products in large quantities. This is an example of:

• A) Limit pricing.
• B) 2nd degree price discrimination.
• C) 1st degree price discrimination.
• D) 3rd degree price discrimination.

According to classical economics, what is the primary driver of economic growth and stability?

• A) Labor unions and collective bargaining.
• B) A free market, where prices and wages adjust based on supply and demand.
• C) Government intervention and regulation.
• D) Consumer spending and demand.

In cement industry, collusion of different firms depends on:

• A) Implementation of antitrust laws.
• B) Existence of price leader.
• C) All of the given options are correct.
• D) Stability of the market.

Suppose the marginal physical product of labor equals Rs. 850. If the price of good that workers produce is Rs. 65, then the value of marginal product of labour equals:

• A) Rs. 56550
• B) Rs. 65342
• C) Rs. 59321
• D) Rs. 55250

Which of the followings is an example of information good?

• A) National defense
• B) Software development
• C) Subsidized housing
• D) Food stamps

In which of the following oligopoly model prices will tend to be very rigid?

• A) kinked demand curve
• B) Stackelberg
• C) Bertrand
• D) Cournot

Suppose a firm is operating in oligopolistic market structure. The demand curve for its products is:

• A) Downward sloping.
• B) Horizontal.
• C) Perfectly elastic.
• D) Perfectly Inelastic.

Which of the following statements is TRUE about allocative efficiency?

• A) Marginal revenue is equal to average revenue
• B) Marginal revenue is greater than marginal cost
• C) Marginal revenue is equal to marginal cost
• D) Marginal cost is equal to average cost

Famous concept “Government has a role in maintaining full employment” is given by:

• A) J.B. Say.
• B) J.M. Keynes.
• C) Adam Smith.
• D) David Ricardo.

In the kinked demand curve model, if one firm reduces its price then other firms will:

• A) Raise their price.
• B) Not change their price.
• C) Compete on a non-price basis.
• D) Reduce their price.

What characterizes information products in economics?

• A) They are produced by traditional manufacturing processes.
• B) They are intangible and non-rivalrous in consumption.
• C) They have physical attributes.
• D) They are always excludable.

Monopolist earns supernormal profit and can invest their supernormal profits in:

• A) All of the given options are true
• B) Sustain a price war into new foreign market
• C) Development of new innovative products
• D) Research and development

A monopolistic competitive industry is in equilibrium in the long run at the point where:

• A) Demand curve is tangent to marginal cost curve
• B) Marginal cost curve is tangent to average cost curve
• C) Demand curve is tangent to marginal revenue curve
• D) Demand curve is tangent to average cost curve

What could be a barrier to entry for potential competitors in a natural monopoly?

• A) Diseconomies of scale
• B) Large initial fixed costs
• C) Low initial fixed costs
• D) Small market size

Which of the following is a key feature that distinguishes monopolistic competition from perfect competition?

• A) The homogeneity of products
• B) The number of firms in the market
• C) The level of government intervention
• D) The absence of barriers to entry

Which of the following can occur at long run market equilibrium according to Keynes school of thought?

• A) All factors of production must be fully employed.
• B) People are not unemployed involuntarily.
• C) All of the given options are correct.
• D) Factors of production can be unemployed.

Which of the following markets is most likely to be oligopolistic?

• A) The market for clothing.
• B) The market for aluminum.
• C) The market for wheat.
• D) The market for vegetables.

Suppose a monopolist is earning supernormal profit in the short run. In the long run, it will make:

• A) Normal loss
• B) Maximum loss
• C) Normal profit
• D) Supernormal profit