In which of the followings market structure point of maximum allocative efficiency is achieved?

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

Profit is maximized when:

• A) Marginal revenue product equals marginal input cost.
• B) Marginal input cost is zero.
• C) Marginal revenue product is less than marginal input cost.
• D) Marginal revenue product is greater than marginal input cost.

Which of the following is a reason for firms in monopolistic competition to engage in non-price competition?

• A) Product differentiation
• B) Government regulation
• C) High barriers to entry
• D) Low market demand

Which efficiency is concerned with producing goods in the most cost-efficient manner?

• A) Technical efficiency
• B) Economic efficiency
• C) Allocative efficiency
• D) Productive efficiency

Which of the following is the pre-requisite of price discrimination?

• A) Markets should be independent
• B) Firms should be inflexible to price discriminate
• C) None of the given options is true
• D) Price elasticity of demand for different customers should be same

In cement industry, collusion of different firms depends on:

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

If one firm increases its price, in the kinked demand curve model then:

• A) Other firms will reduce their price.
• B) Other firms will decrease their output level.
• C) Other firms will increase their output level.
• D) Other firms will not increase their price.

The value of marginal product of labor is:

• A) Marginal physical product of labor - Price of the good
• B) Marginal physical product of labor × Price of the good
• C) Marginal physical product of labor + Price of the good
• D) Marginal physical product of labor ÷ Price of the good

Which of the followings is an example of information good?

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

For a firm buying labor competitively, the marginal input cost is equal to the:

• A) Price of output.
• B) Wage.
• C) Cost of raw materials.
• D) Interest rate.

Suppose the marginal physical product of labor equals Rs. 1500. If the price of good that workers produce is Rs. 50, then the value of marginal product of labour equals:

• A) Rs. 7500
• B) Rs. 3500
• C) Rs. 3300
• D) Rs. 75000

Suppose in cement industry, five firms get together and decide the optimal quantity and price that maximize their profits. In which market structure, these firms are operating?

• A) Collusive oligopoly
• B) Monopolistic Competition
• C) Non- collusive oligopoly
• D) Perfect competition

A(n) __________ may start a price war in order to get a larger share of the market.

• A) Oligopolist
• B) Monopolist
• C) Perfect competitor
• D) Monopolistic compititor

WAPDA is the only power supply company in Pakistan. It maximizes its profits at a point where:

• A) Marginal Cost < Marginal Revenue.
• B) Marginal Cost = Average Revenue.
• C) Marginal cost< Average Revenue.
• D) Marginal Cost = Marginal Revenue.

Which of the following statements is TRUE about allocative efficiency?

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

According to Keynesian economics, what was the primary driver of economic downturns such as the Great Depression?

• A) Overproduction and excess supply in the market.
• B) Government intervention and regulation.
• C) A surplus of available jobs in the labor market.
• D) Lack of consumer spending and effective demand.

Which of the following point is achieved, if price is equal to marginal cost?

• A) Allocative inefficiency
• B) Productive efficiency
• C) Productive inefficiency
• D) Allocative efficiency

The market for plumbers is characterized by the existence of a large number of similar, but not identical substitutes. This market is best considered as:

• A) Perfect competition.
• B) An oligopoly.
• C) A monopoly.
• D) Monopolistic competition.

In which market structure is allocative efficiency maximized?

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

To hire the next worker, the firm pays Rs.50. This Rs.50 is the:

• A) Marginal revenue.
• B) Marginal product
• C) Marginal input cost.
• D) Marginal revenue product.