Economics LET EXAM 319
Economics LET EXAM 319
Economics LET EXAM 319
1. Microeconomics deals with the study of two market forces that allocate resources.
NOTES What are these two market forces?
A. income and price level C. income and profit
B. demand and supply D. inflation and deflation
2. It is Latin phrase that means “all other forces held constant”. Without this assumption,
it will be difficult to isolate the effects on market outcome of individual factors.
A. Unus Instar Omnium C. Ceteris Paribus
B. Carpe Diem D. Hakuna Matata
3. This refers to the quantity of a commodity in the market that an individual wants to
purchase in a given period of time.
A. Demand C. Stock
B. Supply D. Inventory
4. According to this law, there is an inverse relationship between the price of goods and
its quantity demanded.
A. Law of Supply C. Law of Comparative Advantage
B. Law of Absolute Advantage D. Law of Demand
9. As the price of ice cream increases, the demand for ice cream cone
___________________.
A. Increases C. decreases
B. does not change D. changes drastically
10. If the price of Sampaloc used for Sinigang goes up, the demand for Camias will
______________.
A. increase C. decrease
B. remain constant D. change drastically
11. The demand for a currently available cellular phone model will _________________ if
a new model is about to come out.
A. remain constant C. decrease
B. increase D. change drastically
12. This refers to a table showing how the quantity of a good or service that consumers
want to purchase changes as the price of that good or service changes.
A. supply matrix C. demand schedule
B. demand matrix D. supply schedule
13. This refers to a table showing how the quantity of a good or service that producers
want to sell changes as the price of that good or service changes.
A. supply matrix C. demand schedule
B. demand matrix D. supply schedule
14. According to this law, an increase in price will lead to an increase in the quantity
supplied of the good while other factors remain constant.
A. Law of Supply C. Law of Demand
B. Law of Market Equilibrium D. Law of Absolute Profit
15. A shift of the supply curve happens when there is a change in _________________.
A. price of inputs C. level of technology
B. number of firms D. All of the above
17. This condition is reached when the price has adjusted to a level at which the quantity
demanded equals the quantity supplied.
A. market equilibrium C. inflation
B. market disequilibrium D. deflation
18. This refers to the maximum price above which the price charged by suppliers for a
commodity is not permitted to rise.
A. mark down price C. price ceiling
B. price floor D. mark up price
19. This refers to the minimum price below which the price buyers pay for a commodity is
not permitted to fall.
A. mark down price C. price ceiling
B. price floor D. mark up price
20. This term refers to a mechanism or arrangement whereby buyers and sellers interact
and in the process determine the price and quantity bought and sold.
A. Investment C. business
B. Market D. income generation
21. In this kind of market structure, every buyer and seller takes the market price as given,
and depending on the price, decides on the quantity to buy and sell, respectively.
A. Oligopoly C. perfectly competitive market
B. Monopoly D. imperfectly competitive market
22. The following conditions are necessary for perfect competition to exist. Which of the
following is INCORRECT?
A. the existence of a large number of buyers and sellers
B. the items sold by different firms are all the same
C. perfect information exists in the market
D. transactions involving buying and selling entail additional costs
23. This kind of market structure exists when there is only one seller of a product or
service and the product or service has no close substitutes.
A. Oligopoly C. monopoly
B. perfectly competitive market D. monopolistic competition
24. The owner of an essential input and supply chain in production as well as high cost of
capital inputs needed to start a business are some examples of what kind of barrier?
A. structural barrier C. strategic barrier
B. market barrier D. legal barrier
25. This kind of barrier is being showed when a monopolist discourages entry of new firms
by charging a very low price that new entrants cannot match.
A. structural barrier C. strategic barrier
B. market barrier D. legal barrier
26. What kind of barrier is being showed when franchises, patents and copyrights give
some firms exclusive use over a successful business model, inventions or innovations
over a period of time?
A. structural barrier C. strategic barrier
B. market barrier D. legal barrier
27. This refers to a market structure where there are only few sellers and the actions of
any seller can influence the market price.
A. Oligopoly C. monopoly
B. perfectly competitive market D. monopolistic competition
28. This refers to a market structure that has characteristics associated with perfect
competition and imperfect competition.
A. Oligopoly C. monopoly
B. Perfectly competitive market D. monopolistic competition
29. This refers to the market value of all final goods and services produced within a
country during a given year.
A. Gross National Product C. Gross Domestic Product
B. Gross National Profit D. Gross Domestic Profit
31. One way of calculating GDP is to add up consumer spending on goods and services;
investment spending by firms; government spending on goods and services; and
exports, then subtract the value of imports. What do we call this approach?
A. Value Added Approach C. Capital Approach
B. Expenditure Approach D. Income Approach
32. This term refers to a general increase in all prices thus decreases a currency’s
purchasing power.
A. Deflation C. Price ceiling
B. Price index D. Inflation
39. Money is given to sellers in exchange for their product or service. People use an item
as money because they are certain that it will be accepted in transactions that allow
them to obtain goods and services. What function of money is being showed?
A. Money as a medium of exchange
B. Money as an investment profit
C. Money as a unit of account
D. Money as a store of value
40. Money serves as a yardstick in setting prices and recording debts and profit. What
function of money is being described?
A. Money as a medium of exchange
B. Money as an investment profit
C. Money as a unit of account
D. Money as a store of value
41. Money retains its value over time. Thus, it can be kept for now and spent some time in
the future. What function of money is being described?
A. Money as an investment profit
B. Money as a medium of exchange
C. Money as a store of value
D. Money as a unit of account
43. This kind of policy refers to the government’s use of government fund and taxes to
influence the overall demand for goods and services in the economy.
A. Monetary policy C. Fiscal policy
B. Foreign policy D. Investment policy
44. Compensation for services and gain from sale of goods or other properties is the basis
for what kind of tax?
A. Excise tax C. Property tax
B. Estate tax D. Income tax
45. Profits made by selling a financial asset at a price that is higher than its purchase price
is the basis for what kind of tax?
A. Income tax C. Capital Gains tax
B. Estate tax D. Property tax
46. The value of land, improvements to land and personal property is the basis for what
kind of tax?
A. Income tax C. Capital Gains tax
B. Estate tax D. Property tax
47. The value of goods manufactured or produced in the Philippines for domestic sale or
consumption is the basis for what kind of tax?
A. Income tax C. Estate tax
B. Excise tax D. Capital Gains tax
48. The value of sale or lease of properties, goods or services is the basis for what kind of
tax?
A. Value-added tax C. Capital Gains tax
B. Property tax D. Sales tax
49. The value of property transferred between two or more people who are living at the
time of transfer is the basis for what kind of tax?
A. Property tax C. Sales tax
B. Excise tax D. Gift or Donor’s tax
50. The value of transfers from a deceased person to its legal heirs and beneficiaries is the
basis for what kind of tax?
A. Estate tax C. Gift or Donor’s tax
B. Property tax D. Excise tax
51. The value of goods transferred across international border is the basis for what kind of
tax?
A. Excise tax C. Property tax
B. Customs Duty tax D. Estate tax
52. The value of sales of certain goods and services to its final end user is the basis for
what kind of tax?
A. Capital Gains tax C. Sales tax
B. Property tax D. Income tax
53. If a supply curve for a good is price elastic, then the ____________________________
to changes in the price of that good.
A. quantity supplied is sensitive C. quantity demanded is insensitive
B. quantity demanded is sensitive D. quantity supplied is insensitive
54. If a fisherman must sell all of his daily catch before it spoils for whatever price he is
offered, once the fish are caught the fisherman's price elasticity of supply for fresh fish is -
_________.
A. zero C. infinite
B. one D. two
55. If supply is price inelastic, the value of the price elasticity of supply must be ______.
A. infinite C. zero
B. less than 1 D. greater than 1
56. If there is excess capacity in a production facility, it is likely that the firm's supply curve
is_________________.
a. price inelastic
b. unit price inelastic
c. unit price elastic
d. price elastic
58. If consumers think that there are very few substitutes for a good, then
______________________________.
a. supply would tend to be price elastic
b. demand would tend to be price elastic
c. demand would tend to be price inelastic
d.supply would tend to be price elastic
59. Which of the following would cause a demand curve for a good to be price inelastic?
a. The good is a luxury.
b. There are a great number of substitutes for the good.
c. The good is a necessity.
d. The good is not a necessity.
66. The economic activity involved in the manufacturing of goods is known as the activity of?
A. production C. exchange
B. distribution D. consumption
67. Goods that are necessities to most – if not all – people in a country are known as?
A. basic goods C. public goods
B. luxury goods D. free goods
68. The factor of production that encompasses all man – made resources is called?
A. capital C. land
B. entrepreneurship D. labor
70. The payment for the factor of production known as capital is known as?
A. interest C. rent
B. profit D. salaries and wages
71. The economic system that prevails over many communistic countries and states is?
A. Traditional economic system C. Command economic system
B. Market economic system D. Mixed economic system
72. The ability to use the various factors of production to produce products is called?
A. capital C. land
B. entrepreneurship D. labor
73. The basic economic activity specifically designed to bring products from producers to
consumers is known as?
A. production C. exchange
B. distribution D. consumption
76. Modern economics today already use the type of economic system called?
A. Traditional economic system C. Command economic system
B. Market economic system D. Mixed economic system
85. Monopolistic is a market structure that can be differentiated from a monopoly in terms
of their _______?
A. number of buyers C. both A and B
B. number of sellers D. neither A nor B
86. Which of the following best defines opportunity cost?
A. It is the cost of labor used in the production process.
B. It is the cost of producing those goods most desired by a given economy.
C. It is the cost of the input mix that will lead to the greatest rate of growth for a
given company.
D. It is the amount of one product that must be given up in order to produce an
additional unit of another product.
87. Which of the following explains why a production possibilities curve is often
represented as concave (bowed out) from the origin?
A. Constant returns to scale C. Increasing opportunity cost
B. Decreasing opportunity cost D. The law of demand
88. Assume that consumers consider corn and cassava to be substitutes. A significant
decrease in the supply of corn will affect the cassava market by?
A. decreasing the demand for cassava and therefore the price of cassava.
B. decreasing the supply of cassava and therefore the price of cassava.
C. increasing the demand for cassava and therefore the supply of cassava.
D. increasing the demand for cassava and therefore the price of cassava.
89. In which of the following market structures do firms recognize their mutual
interdependence?
A. Monopoly C. Oligopoly
B. Monopsony D. Perfect competition
90. Following a prolonged power outage, the price of flashlights normally increases
significantly. If cities had passed laws prohibiting price increases for flashlights, during
power outages such laws would most likely?
A. create a shortage of flashlights
B. have no effect on the availability of flashlights
C. make flashlights more available
D. shift the demand curve for flashlights to the right
93. This is the amount spent by consumers, businesses and government within a country
on final goods and services.
A. Average level of price. C. Inflation Rate
B. Consumer Price Index (CPI) D. Gross Domestic Purchase
94. The annual percentage change in the average price level is?
A. Average level of price. C. Inflation Rate
B. Consumer Price Index (CPI) D. Gross Domestic Purchase
95. This is a measure of how much it costs to purchase a market basket of goods and
services.
A. Average level of price. C. Inflation Rate
B. Consumer Price Index (CPI) D. Gross Domestic Purchase
96. This is a measure that tracks the average price level from a base year.
A. Average level of price. C. Inflation Rate
B. Consumer Price Index (CPI) D. Gross Domestic Purchase
97. The goods and services that are bought by the ultimate users is called?
A. Consumer Price Index (CPI) C. Inflation rate
B. Final goods and services D. Relative price shift
98. A situation where the inflation rate of a good or service is significantly higher or lower
than the overall inflation rate.
A. Consumer Price Index (CPI) C. Inflation rate
B. Final goods and services D. Relative price shift
99. An increase in which of the following would cause the aggregate demand curve to shift
to the left?
A. Consumer optimism C. Income taxes
B. Cost of resources D. Population
100. Policies intended to reduce demand – pull inflation are most likely to increase which
of the following in the short run?
A. Gross domestic product C. The price level
B. The labor force rate D. Unemployment
101. An increase in which of the following would least likely increase labor productivity?
A. Human capital C. Technological improvements
B. Physical capital D. The labor force
102. Advocates of a monetary rule recommend increasing the money supply at a rate that
is equal to the rate of increase in which of the following?
A. Level of imports C. Long - run real gross domestic product
B. Level of exports D. Price level
103. Which of the following is the best example of a pure public good?
A. Electricity from a public utility. C. Mail delivery service by the post office
B. Imported oil D. National defense
104. This is the amount of money that a worker is paid based on the number of hours,
days, etc.
A. Income C. Salary
B. Profit D. Wage
108. The following are the agencies concerned in information and education to facilitate sound
choice and the proper exercise of rights by the consumer EXCEPT:
A. Department of Agriculture C. Department of Trade and Industry
B. Department of Health D. National Food Authority
111. What term refers to the social science concerned with how individuals, institutions, and
society make choices under conditions of scarcity?
A. economic perspective C. marginal analysis
B. economics D. scientific method
112. This refers to the inputs or forms of production, used to produce the goods and services
that people want.
A. Resources C. scarcity
B. opportunity cost D. wages
113. The managerial and organizational skills needed to start a firm, combined with the
willingness to take risks refers to__________.
A. physical capital C. entrepreneurial ability
B. service D. economic thinking
114. This occurs when the amount people desire exceeds the amount available at a zero price.
A. service C. scarcity
B. demand D. supply
115.What term refers to the value of the good, service, or time forgone to obtain something
else?
A. economic problem C. rational self-interest
B. capital D. opportunity cost
116.A set of arrangements through which buyers and sellers carry out exchange at mutually
agreeable terms refers to__________.
A. Interest C. market
B. Labor D. contract
117.This refers to the comparison of marginal benefits and marginal costs, usually for decision
making.
A. Marginalism C. margin
B. marginal analysis D. equal assumption
118.The diagram that outlines the flow of resources, products, income and revenue among
economic decision markers is called__________.
A. circular-flow model C. economic model
B. economic slope D. economic chart
119.These are collections of specific economic units treated as if they were one unit.
A. Microeconomics C. principles
B. Aggregate D. necessities
120.What term refers to the study of the economic behavior of entire economics?
A. Microeconomics C. macroeconomics
B. market economy D. economy
121.These term refers to the incremental, additional or extra and is used to describe a change
in an economic value.
A. Fluctuation C. consumer reports
B. Microeconomics D. marginal
122.What term refers to the study of the economic behavior in particular markets, such as that
for computer or unskilled labor?
A. marginal analysis C. microeconomics
B. macroeconomics D. scientific method
123.These are products and services that directly satisfy consumer wants.
A. consumer goods C. capital goods
B. production D. can goods
124.A payment given to resource owners for their labor refers to_________.
A. Interest C. good
B. Wages D. profit
125.A type of capital that consists of factories, machineries, tools, buildings and other human
creations employed to produce goods and services.
A. capital C. behavioral capital
B. natural resources D. physical capital
126.What term refers to the so-called gift of nature used to produce goods and services which
includes renewable and exhaustible resources?
A. fake resources C. resource market
B. natural resources D. human resources
127.This is a systematic pursuit of knowledge by observing facts and formulating and testing
hypotheses to obtain theories, principles, and laws.
A. Theory C. investigation
B. Generalization D. scientific investigation
130.These refers to a viewpoint that envisions individuals and institutions making rational
decisions by comparing the marginal benefits and marginal cost of their actions.
A. purposeful behavior C. marginalism
B. economic perspective D. opportunity cost
131.It refers to the assumption that factors other than those being considered do not change.
A. ceteris paribus C. generalizations
B. principles D. assumptions
133.This is a factor of production that include mineral, and oil deposits, arable land, forests and
water resources.
A. labor C. capital
B. land D. entrepreneurial ability
134.This refers to an assumption that describes the expected behavior of economic decision
makers and what motivates them.
A. other-things-constant assumption C. behavioral assumptions
B. science assumption D. physical assumption
135.What term refers to mathematical models that allow for possible solutions when distinct
economic agents interact in a market?
A. equilibrium solutions C. expressions
B. predictive value D. economic solutions
137.It represents the consumers reference, purchasing power, and their willingness to pay for
a thing of value.
A. demand side C. supply side
B. capital side D. labor side
138.It is a law that asserts that the quantity demanded of a good and/or services is inversely
related to its own price.
A. law of supply C. opportunity cost
B. law of demand D. law of consumption
139.What term refers when the percentage change in quantity demanded is greater than the
percentage change in price?
A. price elasticity C. price inelasticity
B. perfectly inelastic D. perfectly inelastic
140.The over-all level of satisfaction derived from consuming a good or service is
called__________.
A. ordinal utility approach C. marginal utility
B. cardinal utility D. total utility
141.What term refers if the percentage change in quantity demanded is exactly equal to the
percentage change in price?
A. price elastic C. price inelastic
B. unit elastic D. sub-unit elastic
142.This refers to the measure of how much the quantity demanded of a certain good change
as a result of a relative change in its price.
A. price elasticity of supply C. own price elasticity of demand
B. price elasticity D. price elasticity of products
144.All of the following are elements involved in the objective of satisfaction EXCEPT:
A. empirical validation
B. human wants
C. use of resources
D. technique of production which shows how resources are used and combined in
production
145.This refers to the recognition of the interdependence of all decision units and all markets
in the economic system.
A. partial equilibrium analysis C. comparative statics
B. general equilibrium analysis D. dynamic analysis
148.The economic problem determines who much of the wants of each consumer are to be
satisfied.
A. what to produce? C. how to produce?
B. how much to produce? D. for whom to produce?
155.If an increase in consumer incomes leads to a decrease in the demand for camping
equipment, then camping equipment is________.
A. a normal good C. an inferior good
B. a substitute good D. a complementary good
156.An inferior good is one for which an increase in income causes a(n)_________.
A. decrease in supply C. increase in demand
B. increase in supply D. decrease in demand
157.The demand for which of the following is likely to be the most price inelastic?
A. Transportation C. taxi rides
B. bus tickets D. airline tickets
158.If supply is price inelastic, the value of the price elasticity of supply must be_________.
A. Infinite C. zero
B. less than 1 D. greater than 1
162.A firm whose average total cost continually declines at least to the quantity that could
supply the entire market is known as a_________.
A. natural monopoly C. perfect monopoly
B. government monopoly D. regulated monopoly
165.An economic system in which business are allowed to produce any goods and services they
wish to is referred to as_________.
A. centrally planned economy C. free enterprise
B. mixed economy D. private economy
166.What does the statement “Profit is the incentive for business” imply?
A. Profit provides a strong reason to reduce investment
B. Profit reduces the need or efficient use of resources
C. Profit provides a reward for the risk and effort involved
D. Profit provides the incentive to increase expenses
172.These are things that are needed to produce goods and services.
A. efficient use of resources C. factors of production
B. economic systems D. private property
175.Which of the factors is not included in the cause of demand to increase or decrease?
A. sale C. income
B. consumer expectations D. number of consumers
179.What concept of elasticity when the percentage change in quantity demanded is greater
than the percentage change in price.
A. unit elastic C. perfectly elastic
B. price inelastic D. price elastic
180.What type of demand when consumers are prepared to buy all they can at some price and
none at all at any other price.
A. unit elastic C. perfectly elastic
B. price inelastic D. price elastic
181.What type of demand if the percentage change in quantity demanded is less than the
percentage change in price.
A. unit elastic C. perfectly elastic
B. price inelastic D. price elastic
182.What type of demand if the percentage change in quantity demanded is exactly equal to
the percentage change in price.
A. unit elastic C. perfectly elastic
B. price inelastic D. price elastic
183.It is also known as the quantity demanded of the good increases as income increases and
the good being studied.
A. normal good C. inferior good
B. complement good D. superior good
184. It is the quantity of a good falls as income increases, the income elasticity takes a negative
value.
A. normal good C. inferior good
B. complement good D. superior good
187.It is the main difference between the short run and the long run planning horizon.
A. fixed inputs C. total product
B. variable inputs D. input classification
189.It is the percentage of people in the economy who are both able to and looking for work
but who cannot find jobs.
A. cyclinal unemployment C.frictional unemployment
B. structural unemployment D.unemployment rate
193.This category under aggregate income that states that it is the largest component of
national income.
A. rent C. profit
B. interest D. compensation of employees
194. What formula should be used in calculating the real gross domestic product.
A. Real GDP=normal GDP/GDP deflator x 100
B. Real GDP=GDP deflator/nominal GDP x 100
C. Real GDP=Real GDP/GDP deflator x 100
D. Real GDP=Nominal GDP/real GDP x 100
196.Which is not a reason for the aggregate demand curve to have a downward slope.
A. international effect C. investment effect
B. .interest rate effect D. money wealth effect
198.Economists generally single out five important sources of growth, which among the
following states the concept of If an economy is to grow, it will need resources.
A. Entrepreneurship C. Technological advancement
B. Available resources D. Investment and accumulated capital
199.Which statement/s is /are not included in the agreement about general policies that are
good for growth.
I.Encouraging saving and investment
II.Encouraging businessmen to loan big amount
III.Providing more of the right kind of education
IV.Promoting policies that allow taking advantage of specialization
201.This institutionalized own the factors of production and the consumers of the final goods
and services.
a.households b.external sector c.business firms d.public sector
207.Which of the factor or determinants of demand does not affect the shift of demand curve.
a. Change in number of buyers c. Change in number of sellers
b. Change in price expectations d. Change in consumer income.
208.Supply curve shifts to the left in the price of goods when the price .
a. increases b. decreases c. stable d. all of the
above
211.The term tariff and duties are used interchangeably in the tariff and customs code or PD
No. ?
a.1464 b.1446 c.1644 d.1614
212.What article and section states that each local government unit shall have the power to
create its own sources of revenues.
a.Art.V,Sec.10 b.Art.VI,Sec.10 c.Art.X,Sec.5 d.Art.X,Sec.10
214.The rule of taxation shall be uniform and equitable, of theconstitution under section 28 of
what article?
a.VI b.VII c.VIII d.IX
216.It is a constitutional limitation that tax exemption is included in the grant of a franchise
maybe revoked by another law.
a. grant of exemption
b. grant of franchise
c. non-impairment of the Jurisdiction of the SC
d. reserve bills shall originate exclusively from the house of representatives.
217.It is a constitutional limitation which states that no law granting tax exemption shall be
passed without the concurrence of a majority of all members of congress.
a. grant of exemption
b. grant of franchise
c. non-impairment of the Jurisdiction of the SC
d. reserve bills shall originate exclusively from the house of representatives.
218.This constitutional limitation dictates that the congress cannot take away from the SC the
power given to it by the constitution as a final arbiter of the tax.
a. grant of exemption
b. grant of franchise
c. non-impairment of the Jurisdiction of the SC
d. reserve bills shall originate exclusively from the house of representatives.
223.Charactirized as the study of how households and firms make decisions and how they
interact in the markets.
A. Macroeconomics C. Ceteris Paribus
B. Microeconomics D. Economitrics
224.It is commonly used This commonly-used phrase stands for 'all other things being
unchanged or constant'. It is used in economics to rule out the possibility of 'other' factors
changing that is the specific causal relation between two variables.
A. Macroeconomics C. Ceteris Paribus
B. Microeconomics D. Economitrics
225.Because resources are scarce and wants are _________ trade-offs are required.
A. Unlimited C. Efficient
B. Economical D. Marginal
227.Refers to the actual amount received in terms of pesos and or other currencies.
A. Real wage C. Wage
B. Money wage D. Salary
230.It is the ability of a single economic actor to have substancial influence on market prices.
A. Market failure C. Market power
B. Externality D. Oppurtunity cost
231.Charactirize as thing, item and others must be given up to obtain some other item.
A. Market power C. Marginal changes
B. Oppurtunity cost D. Market failure
232.Productivity is charactirized as?
A. The ability of a person to be at help to the society.
B. Measured by the time that a person expend to accomplish a task.
C. The quantity of goods and services produced from each hour of a worker’s time.
D. The quantity of the goods and services that a person cannot produce in a given
period of time.
234.Which of the following is not part of the oppurtrunity cost if going on holiday?
A. the money you spent on a concert
B. the money you spent on food
C. the money you spent on a theatre show
D. the money you spent on buying your shoes
240.The figyre shows how much a worker can produce in one day. The oppurtunity cost of 1
unit of food in Japan is,
food Mechanics
Philippines 10 2
Japan 20 4
A. 1/5 units of mechanics C. 3/5 units of mechanics
B. 2/5 units of mechanics D. 4/5 units of mechanics
242.If an increase in the price of Jag pants leads to an increase in the demand for columbia
shoes, then Jag pants and colunbia shoes are ?
A. complements C. normal goods
B. inferior goods D. substitutes
245.If an increase in consumer incomes leads to a decrease in the demand for computer, then
computer is _____.
A. a normal good C. a substitute good
B. an inferior good D. a complementary good
247.If the price of a good is below the equilibrium price, there is a _______
A. shortage (i.e. an excess demand) and the price will rise.
B. shortage (i.e. an excess demand) and the price will fall.
C. surplus (i.e. an excess supply) and the price will rise.
D. surplus (i.e. an excess supply) and the price will fall.
248.If the price of a good is equal to the equilibrium price, there is a
A. shortage (i.e. an excess demand) and the price will fall.
B. shortage (i.e. an excess demand) and the price will rise.
C. surplus (i.e. an excess supply) and the price will rise.
D. Equal amount of quantity demanded and quantity supplied and the price remains
unchanged.
249.Suppose both buyers and sellers of rice expect the price of rice to rise in the near future.
What would we expect to happen to the equilibrium price and quantity in the market for rice
today?
A. The impact on both price and quantity is ambiguous.
B. Price will decrease; quantity is ambiguous.
C. Price will increase; quantity will decrease.
D. Price will increase; quantity is ambiguous.
250.An inferior good is one for which an increase in income causes a ___________.
A. decrease in supply C. increase in supply
B. increase in demand D. decrease in demand
252.Which of the following would cause a demand curve for a good to be price inelastic?
A. The good is a luxury.
B. There are a great number of substitutes for the good.
C. The good is a necessity.
D. None of these answers.
253.The demand for which of the following is likely to be the most price inelastic?
A. Transportation C. bus tickets
B. jeep fare D. tricycle fare
255.A decrease in supply (shift to the left) will increase total revenue in that market if _____.
A. demand is price inelastic. C. supply is price inelastic.
B. supply is price elastic. D. demand is price elastic.
256.If consumers think that there are very few substitutes for a good, then
A. supply would tend to be price elastic.
B. demand would tend to be price inelastic.
C. demand would tend to be price elastic.
D. supply would tend to be price inelastic.
259.Which of the following statements is true if the government places a price ceiling on rice
₱100 per kilo and the equilibrium price is ₱90 per kilo?
A. There will be a shortage of rice.
B. There will be a surplus of rice.
C. A significant increase in the demand for rice could cause the price ceiling to
become a binding constraint.
D. A significant increase in the supply of rice could cause the price ceiling to become a
binding constraint.
260.Which of the following workers would be most likely to find it more difficult to get a job
after a rise in the minimum wage rate?
A. A teenage worker with few qualifications.
B. A manual worker with fifteen years of work experience.
C. A professional worker with a university degree.
D. All three are equally likely to find it difficult to get a job.
262.The burden of a tax falls more heavily on the buyers in a market when?
A. both supply and demand are inelastic.
B. demand is elastic and supply is inelastic.
C. both supply and demand are elastic.
D. demand is inelastic and supply is elastic.
263.Which of the following statements about the burden of a tax is correct?
A. The burden of a tax falls on the side of the market (buyers or sellers) from which it
is collected.
B. The tax burden generated from a tax placed on a good consumers perceive to be a
necessity will fall most heavily on the sellers of the good.
C. The distribution of the burden of a tax is determined by the relative elasticities of
supply and demand and is not determined by legislation.
D. The tax burden falls most heavily on the side of the market (buyers or sellers) that
is most willing to leave the market when price movements are unfavourable to
them.
264.For which of the following products would the burden of a tax likely fall more heavily on
the sellers?
A. Clothing C. Housing
B. Food D. Entertainment
265.It is the increase in the economy’s ability to produce goods and services.
A. Economic freedom C. Price level stability
B. Economic security D. Economic growth
266. It is the heart about individual autonomy, concerned chiefly with the freedom of choice
enjoyed by individuals in acquiring and using economic goods and resources.
A. Economic freedom C. Price level stability
B. Economic security D. Economic growth
270.Which of the following markets would most closely satisfy the requirements for a
competitive market?
A. Electricity C. cola
B. cable television D. milk.
271. What do we call the elasticity which percentage change in quantity compared to a
percentage change in price?
A. Price elasticity C. Arc elasticity
B. Elasticity D. Coefficient of elasticity
272.Which of the following is NOTa characteristics of rivalry?
A. Goods that are both excludable and rival.
B. Others cant consume the goods unless the good is not yet used .
C. If one person consuming it ‘uses it up’someone else cannot consume it.
D. The property of a good whereby one person’s used dimished other people’s use.
280.It’s basically anything that motivates us to do a certain thing or buy a certain product.
A. Incentives C. Interest rates
B. Money supply D. Oppurtunity cost
281. Its an economic concept wherein it is how much we have to pay to use someone else’s
money or how much we earn when we let the bank use our money.
A. Incentives C. Interest rates
B. Money supply D. Oppurtunity cost
282. What BEST describe the following example ? People are likely to make the choice that has
the most benefit to them, with the least cost, or, put another way, the choice that provides
more in benefits than in costs.
A. Demand and supply
B. Costs and benefit
C. Cost and demand
D. Benefit and supply