Applied Economics Exam.docx

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Which of the following is NOT one of the component factors that make the flow of production possible? A. Land B. Land C. Goods D. Capital These are basic needs and not simply related items or complimentary goods that compliment man’s basic needs in society. A. Bags and shoes B. Clothing C. Electricity D. Food and shelter Economics studies and seeks to allocate ______ human and non-human resources for the material welfare of all. A. Scarce B. Abundant C. Bountiful D. Unlimited Which prescribe the abolition of private property by force? A. Exaggerated capitalism B. Socialism C. Communism D. Moderate capitalism Which of the following is an example of capital as a factor of production? The factory plant of general manufacturing company Money held by general manufacturing company A general manufacturing bond All of the above The reality that a decline in the price of a product causes the producers to lessen the quantity of the good they plan to produce illustrates: A. a change in supply B. the law of supply C. the nature of an inferior good D. the law of demand When the government chooses to use resources to build highways, those resources are no longer available to build school. This illustrates the concept of A. optimization B. microeconomics C. macroeconomics D. opportunity cost Economics is concerned with A. man’s choice of living B. wealth-getting and wealth using C. the allocation of scarce resources D. all of the above The term ECONOMICS is most closely related with

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A. Free B. Scarce C. Restricted D. Unlimited Microeconomics best describes the study of the: Level of national unemployment Effects of aggregate inflation Growth rate of GNP Behaviour of individual economic agents

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Macroeconomics is described best by which of the following statements? Macroeconomics is the study of the economy as a whole Macroeconomics is the study of how firms strive to maximize profits Macroeconomics is the study of the demand for labor by firms and the supply of labor by households Macroeconomics is the study of why some products cost more than others

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The primary difference between microeconomics and macroeconomics is that: Macroeconomics studies the operation and performance of the economy as a whole Microeconomics studies the aggregate level of income and employment In formulating and implementing government policy, microeconomics shows the effects of policy variables on the entire economy D. Macroeconomics studies the operation and performance of individual economic units. 13. In what political set-up do government control major industries such as media, transportation and telecommunications? A. capitalist B. feudalist C. laissez faire D. socialist 14. Tomatoes are off season and so price for tomatoes up. Which principle of economics explains it? A. Law of Cause and Effect B. Law of Supply and Demand C. Substitution Effect

D. Principle of Utility 15. Under which type does the Philippines fall? A. Communist B. Mixed C. Socialist D. Capitalist 16. Scarcity of resources in relation to series of needs occurs A. only under socialism B. only in Africa C. only during war time D. in all societies 17. Refers to how much of goods and services producers can offer. A. supply schedule B. demand schedule C. supply D. demand 18. The simple circular flow models shows that A. Firms demand resources and supply outputs B. Households demand outputs and supply resources C. Firms generate the income necessary for households to consume D. Households generate the revenue necessary for firms to produce 19. What do you call the trade in which people exchange goods without using money? A. mercantilism B. barter C. capitalism D. Marxism 20. Which of the following is an example of a real flow from household to firms? A. Factors of production B. goods and services C. income from factors of production D. payment for factors of production 21. It refers to the tangible, physical good that a person or society creates in the expectation that its use will improve or increase future production. A. rent B. capital C. interest D. labor 22. A condition where quantity demanded is greater than quantity supplied. A. shortage B. surplus C. market equilibrium D. economic value 23. Which of the following is NOT one of the component factors that make the flow of production possible? A. Land B. Land C. Capital D. Capitalism 24. Goods that are used in conjunction with other goods. An increase in price of one lowers the quality demanded of the others. A. normal goods B. inferior goods C. substitute goods D. Complementary goods 25. It means that people are combining the other there factors of production to create some products or services to sell. A. Entrepreneurship B. Capital C. Land D. Labor 26. An economic system where economic decisions are made in a decentralized manner by economy’s participants and manifested by trade. A. Command Economy B. Market Economy C. Traditional Economy D. Pure competition 27. The transformation of inputs to outputs is called_____. A. Consumption B. Exchange C. Production D. Distribution 28. The maximum price of goods and services set by government as a form of price control. A. Supply schedule B. price control C. price ceiling D. price floor 29. An economic system in which economic decisions are made with great influence from the past. A. Traditional Economy B. Command Economy C. Market Economy D. Socialism 30. Which of the following statement regarding the Law of Supply is true? A. The quantity supplied is determined by price and other factor B. The quantity supplied increases as prices decreases

C. The quantity supplied increases as price increases D. All of the above 31. A table that shows how consumers behave in terms of quantity demanded in relation to price is called a demand ______, while the graph is called_____. A. Slope; curve B. Schedule; curve C. curve; slope D. schedule; slope 32. Which problem of resources falls under the task of economic allocation? A. quality B. scarcity C. standards D. excellence 33. How is the concept of market economy best understood? A. Companies have an economic vision B. Producers look at consumers on signals for what to sell C. Owners care about products, not consumers D. Parent company dictates consumption 34. The following are the elements that make possible nations to produce goods and services EXCEPT one: A. labor force B. capital C. national resources D. geographical locations 35. Which economic system is otherwise known as free enterprise? A. Capitalism B. Communism C. mixed economies D. totalitarianism 36. In a communist country, the following holds true EXCEPT ________. A. Productive resources are owned by government B. The citizens vote on some economic policies C. The government determines what shall be produced an in what quantity D. The government sets wages and prices 37. These are the best ways we can deal with scarcity of resources EXCEPT _____. A. Making right choices in capital goods B. Keeping resources as unused reserve C. Using resources efficiently D. Distributing resources equitably 38. The equilibrium point in an economic graph means A. stable B. changeable C. equal D. none of the above 39. Which of the following is not the concern of Microeconomics? A. Decisions of individual units B. Economic issues affecting the national economy C. Price determination in various type of market D. Social welfare 40. The quantity of good that buyers are willing to buy: A. demand B. demand schedules C. demand function D. demand curve