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.

Which of the following is an example of a public good?

• A) Private healthcare
• B) National defense
• C) Cable television subscription
• D) Fast food restaurant

According to Classical economists, the aggregate demand is:

• A) Upward sloping.
• B) Vertical.
• C) Downward sloping.
• D) Horizontal.

According to classical economics, what is the role of government in the economy?

• A) It should control the production and distribution of goods and services.
• B) It should avoid intervention and allow the market to self-adjust.
• C) It should intervene to stabilize prices.
• D) It should actively manage the economy to achieve full employment.

Unemployment due to changing job or due to movement around the country is known as:

• A) Structural unemployment.
• B) Seasonal unemployment.
• C) Cyclical unemployment.
• D) Frictional unemployment.

Let the marginal propensity to consume equals 0.75. The value of multiplier in this case is:

• A) 1.33.
• B) 4.
• C) 0.25.
• D) 2.33.

Suppose the overall production of goods and services increases in a country because of technological improvement. This will shift:

• A) Aggregate supply curve to the left.
• B) Aggregate demand curve to the right.
• C) Aggregate supply curve to the right.
• D) Aggregate demand curve to the left.

The method which sums up all the incomes earned by all factors of production in the economy is known as:

• A) The spending method
• B) The value added method
• C) The expenditure method
• D) The factor income method