All other things being equal, a decrease in government spending will:

• A) Shift the aggregate demand curve to the left.
• B) Make the aggregate demand curve flatter.
• C) Shift the aggregate demand curve to the right.
• D) Make the aggregate demand curve steeper.

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

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

When oligopolists collude, they are able to:

• A) Restrict output, but not raise price.
• B) Raise price and restrict output, and therefore attain the monopoly profit.
• C) Raise price, but not restrict output.
• D) Raise price and restrict output, but not attain the monopoly profit.

What does the Aggregate Supply (AS) curve represent in macroeconomics?

• A) The total output of goods and services that producers are willing to supply at different price levels.
• B) The total demand for goods and services in an economy.
• C) The total supply of money in an economy.
• D) The total amount of labor available in an economy.

The concept that “Supply creates its own demand" is given by:

• A) None of the given options
• B) Keynesians
• C) New Keynesians
• D) Classicals

The concept of "Say's Law" in classical economics suggests:

• A) That government intervention is necessary for economic stability.
• B) That saving is more important than spending.
• C) That demand creates its own supply.
• D) That supply creates its own demand.

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) Price elasticity of demand for different customers should be same
• D) None of the given options is true

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

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

Which of the following would be studied in macroeconomics?

• A) Overall consumption of households
• B) All of the given options
• C) Inflation
• D) Gross domestic product

In kinked demand curve model, if one firm lowered its price, everyone else would lower their prices. In this case demand for the firm will be:

• A) Elastic
• B) Perfectly inelastic
• C) Inelastic
• D) Perfectly elastic

Suppose five firms get together and decide the optimal quantity and price. But later on, two firms charge lower price to increase their share and break the agreement between these firms. This is possible in case of:

• A) Non- collusive oligopoly.
• B) Collusive oligopoly.
• C) Duopoly.
• D) Monopolistic Competition.

What is the primary purpose of calculating the marginal social cost (MSC) in economics?

• A) To maximize producer surplus.
• B) To measure the full cost of production, including external costs.
• C) To identify the costs borne by producers.
• D) To determine the equilibrium price in a market.

In which of the following market structures, there is absence of entry barriers and many firms sell differentiated products?

• A) Oligopolistic
• B) Monopoly
• C) Purely competitive
• D) Monopolistically competitive

An important difference between the approaches of the Classical and Keynesian economists uses to achieve a macroeconomic equilibrium is that:

• A) Classical economists believe that monetary policy will certainly affect the level of output; Keynesians believe that money growth affects only prices
• B) Keynesian economists actively promote the use of fiscal policy; the Classical economists do not
• C) Keynesian economists actively promote the use of monetary policy to improve aggregate economic performance; Classical economists do not
• D) Classical economists believe that fiscal policy is an effective tool for achieving economic stability; Keynesians do not

In macroeconomics, what does the term "Aggregate Demand" (AD) refer to?

• A) The total spending on all goods and services in an economy at a given price level.
• B) The total spending by households on consumer goods and services.
• C) The total output of all goods and services produced in an economy.
• D) The total number of workers in the labor force.

If total revenue of a firm is Rs. 52000 and total cost is Rs. 43500, then firm will bear profit/loss equal to:

• A) Rs. 8500
• B) Rs. 25000
• C) Rs. 1000
• D) Rs. 18500

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

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

Which of the following market structures does not pay attention to production efficiency?

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

The key characteristic of an oligopoly is:

• A) A large number of similar products.
• B) A single dominant firm.
• C) A small number of large firms.
• D) Many small firms in the market.

In kinked demand curve model, if one firm raises prices, no one else will raise their prices. In this case demand for the firm will be:

• A) Perfectly inelastic
• B) Inelastic
• C) Elastic
• D) Perfectly elastic