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Pakistan Affair

123. The goal of pure market economy is to best meet the desires of:

  1. A) Consumers
  2. B)Companies
  3. C)Workers
  4. D)The government
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Pakistan Affair

124. In a market system, sellers act in____________ interest, But this leads to behavior in ____________ interest :

A )self; self

B)Self; Society’s

C)Society’s; Society’s

D)Society’s; self

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Pakistan Affair

125. Why is the law of diminishing marginal returns true?

A )Specialization and division of labor

B)Spreading the average fix cast

C)Limited capital

D)All factors being variable in the long-run

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Pakistan Affair

126. Which of the following is a characteristic of pure monopoly?

A )One seller of one product

B)Low barriers to entry

C)Close substitutes product

D) Perfect information

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Pakistan Affair

127. In pure monopoly what is the relation between price and marginal revenue?

A )The price is greater than the marginal revenue

B)The price is less than the marginal revenue

C)There is no relation

D)They are equal

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Pakistan Affair

128. In order to maximize profits, a monopoly company will produce that quantity at which the:

A )Marginal revenue equals average total cost

B)Price equals marginal revenue

C)Marginal revenue marginal cost

D)Total revenue equals total cost

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Pakistan Affair

129. Compared to case of perfect competition, a monopolist is more likely to:

A )Charge a higher price

B)Produce the lower quantity of the product

C)Make a greater amount of economic profit

D)All of above

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Pakistan Affair

130. Which of the following is necessary for a natural monopoly?

A )Economies of scale

B)A high proportion of the total cost of capital goods

C)The market is very small

D)All of above

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Pakistan Affair

131. In order to practice the price discrimination, which of the following is needed?

A )Some degree of monopoly power

B)An ability to separate the market

C)An ability to prevent reselling

D)All of above

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Pakistan Affair

132. In price discrimination, which section of the market is charged the higher price?

A )The section with the richest people

B)The section with the oldest people

C)The section with the more inelastic demand

D)The section with the more elastic demand