Microeconomics Principles Exam
Questions
Microeconomic Principles Exam Questions
Wage Discrepancies
The difference in average wages between Sri Lanka (12 cents/hour) and the
USA ($15/hour) is addressed. The provided options for explaining this
difference are: US multinational corporations exploiting workers,
government protection of workers in the USA, higher American labor
productivity, and employer greed in Sri Lanka.
Profit Maximization
The question of where a firm maximizes profits is posed. The options
include: total revenue equals total cost, marginal revenue equals total
revenue, average variable cost equals average revenue, and marginal cost
equals average fixed costs.
Relative Price
The question asks which statement is NOT true regarding relative price.
One option states that the price of a good is determined by all other
variables. Another option states that the prices of other goods affect the
relative price of the good.
Bank Profits
The question asks what are the bank's total profits if the quantity of
loanable funds is $2 million. The possible answers are $60,000, $40,000,
$2,200, and $20,000. It is also suggested that there might not be enough
information to answer the question.
Advertising
The question asks which statement about advertising is NOT true. The
options include: advertising lowers prices and is a form of competition,
advertising is a mechanism for expanding consumer choices.
Monopoly
The question addresses monopolies. It states that a single-price
monopolist's marginal revenue curve is above the demand curve because it
cannot sell additional output without lowering the price on previous output.
It also states that perfect price discriminating monopolists do not restrict
output but raise price as compared to the perfect price competition market.
