When the marginal revenue product of labor is greater than the marginal input cost of labor, the profit maximizing firm will:

• A) Hire more labor.
• B) Maintain the same employment.
• C) Hire less labor.
• D) Decrease output.

Consumption spending, investment expenditures, government expenditures and net exports are the components of:

• A) Aggregate demand.
• B) Aggregate supply.
• C) Household income.
• D) Government revenue.

If a country imports more goods and services from other countries, then the aggregate demand will:

• A) First rise then start falling.
• B) Increase.
• C) Decrease.
• D) Remain unchanged.

If Competitive markets do not achieve equitable outcomes, then it is called:

• A) Market failure.
• B) Non-rational consumers.
• C) Imperfect market structure.
• D) Limit pricing.

Which of the following formulas represents net present value?

• A) Present value x Purchase cost
• B) Present value - Purchase cost
• C) Present value / Purchase cost
• D) Present value + Purchase cost

Business-cycle instability is best corrected through government policies is a primary implication of:

• A) J.M. Keynes.
• B) Monetarist.
• C) Classical Economists.
• D) New Classical Economists.

In the context of Marginal Disutility of work(MDUW), what does "marginal" refer to?

• A) The additional disutility from working one more hour.
• B) The cost of not working.
• C) The overall utility of leisure.
• D) The total value of disutility.

If the monopolist earns profit then government can regulate this situation through:

• A) None of the given options is true
• B) Both taxes and subsidies
• C) Subsidies
• D) Taxes

Which of the following is NOT a public good?

• A) Knowledge
• B) Electronics
• C) Street lights
• D) National security

What is a real-world example of an oligopolistic industry?

• A) Street food vendors
• B) Farmers' markets
• C) Local hair salons
• D) Smartphone manufacturing

As compared to existing firms, a new firm entering in monopolist market has to face:

• A) None of the given options
• B) Low costs
• C) Equal costs
• D) High costs

In the context of Marginal Disutility of work (MDUW), when a person decides to work fewer hours and has more leisure, what does this imply about their Marginal Disutility of work (MDUW)?

• A) MDUW is decreasing.
• B) MDUW is irrelevant.
• C) MDUW is constant.
• D) MDUW is increasing.

Which term describes an agreement among firms in an oligopoly to coordinate their actions and reduce competition?

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

A lighthouse is a classic example of a:

• A) Common-pool resource.
• B) Merit good.
• C) Public good.
• D) Private good.

Which of the following relationship is true for monopoly power and elasticity of demand?

• A) Direct
• B) All of the given relations can occur
• C) No relation
• D) Inverse

What was the primary policy recommendation by Keynesians to address the Great Depression?

• A) Reducing taxes to stimulate consumer spending.
• B) Implementing high-interest rates to control inflation.
• C) Increasing government spending to create jobs and boost demand.
• D) Reducing government spending to balance the budget.

In the Car industry, fewer manufacturers manufacture slightly differentiated cars. They make decisions by considering the actions of rival firms. This industry operates in:

• A) Monopoly.
• B) Natural Monopoly.
• C) Oligopoly.
• D) Monopolistic Competition.

Which of the following factors would shift aggregate demand curve to the right?

• A) Increase in taxes
• B) Decrease in business investment
• C) Decrease in government expenditures
• D) Increase in consumption expenditures

Those who hold the Classical view of the labour market are likely to believe that:

• A) Neither monetary nor fiscal policy will have an effect on output and employment.
• B) Both monetary and fiscal policy will have an effect on output and employment.
• C) Fiscal but not monetary policy will have an effect on output and employment.
• D) Monetary, but not fiscal policy will have an effect on output and employment

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

• A) People are unemployed voluntarily.
• B) Prices remain at very high level.
• C) All of the given options are correct.
• D) Factors of production must be unemployed.