Cebu Sacred Heart College, Inc.

Carcar Campus
Valladolid, Carcar City, Cebu

MIDTERM EXAMINATION IN ECONOMICS WITH AGRARIAN REFORM AND TAXATION

2ND SEMESTER A.Y. 2021-2022

Name: ________________________________________________ Score: _______________________

Year Level: ___________________________________________ Date: ________________________

1. A rise in the price of a good causes producers to supply more of the good. This statement illustrates
A. the nature of an inferior good. C. the law of supply.
B. the law of demand. D. a change in supply
2. A shortage causes the
A. supply curve to shift rightward. C. price to fall.
B. price to rise. D. demand curve to shift leftward
3. A local grocery store orders 200 cases of Pepsi each week and sells them at a price of ₱6.00 per case. At the end of the first
week, they have only sold 160 cases. What economic situation is the grocery store facing and what will have to happen to price
in order for equilibrium to be attained?
A. surplus; price will rise. C. shortage; price will rise.
B. surplus; price will fall. D. shortage; price will fall
4. Which of the following can lead to an increase in the supply for good X?
A. a decrease in the number of sellers of good X.
B. an increase in the price of inputs used to make good X.
C. an increase in consumers' income, assuming good X is a normal
D. an improvement in technology used in production of good X.
5. An increase in the price of electricity will:
A. increase the demand for kerosene heaters.
B. increase the demand for light bulbs.
C. increase the demand for stereos.
D. increase the demand for TVs.
6. According to the law of supply, price and quantity supplied are
A. inversely related
B. positively related
C. not related
D. the same
E. negatively related
7. Successful advertising by the Camel Cigarette Company would
A. cause a downward movement along the existing demand curve for Camel cigarettes
B. cause an upward movement along the existing demand curve for Camel cigarettes
C. shift the demand curve for Camel cigarettes to the left
D. shift the demand curve for Camel cigarettes to the right
8. If lima beans are an inferior good for Alice, a decrease in her income would A. shift her demand curve for lima beans to the left
A. shift her demand curve for lima beans to the right
B. cause her to move upward along her existing demand curve for lima beans
C. cause her to move downward along her existing demand curve for lima beans
9. When we draw a supply curve for automobiles, which of the following is allowed to vary among the different points on the supply
curve?
A. costs of inputs for suppliers
B. future expectations of suppliers
C. technology available to suppliers
D. all of the above
10. A decrease in the price of a movie ticket creates an increase in consumers' purchasing power, so that they can afford to buy
more movie tickets. This is called the
A. substitution effect
B. income effect
C. demand effect
D. diminishing marginal utility effect
11. Which of the following would shift the supply curve for cigarettes?
A. A change in household incomes
B. A change in the price of cigars, a substitute good in consumption but not production.
C. A change in the number of smokers
D. New, higher taxes on tobacco production
12. When economists say that the supply of dry cleaning services has decreased, they mean that
A. there was a downward movement along the supply curve for dry cleaning services
 B. there was an upward movement along the supply curve for dry cleaning services
C. the supply curve for dry cleaning services has shifted to the right
D. the supply curve for dry cleaning services has shifted to the left
13. Which of the following is held constant along the supply curve?
A. price of the good
B. technology
C. both a and d
D. quantity
14. Which of the following is likely to result in a shift in the supply curve for sweaters?
A. an increase in consumer incomes
B. an increase in tariffs that forces sweater manufacturers to import wool at higher prices
C. an increase in sweater prices
D. higher prices for coats, which are substitutes in consumption but not substitutes in production
15. Which of the following would NOT be a determinant of demand?
A. the price of related goods
B. income
C. tastes
D. the prices of the inputs used to produce the good .
16. If the price of a substitute to good X increases, then
A. the demand for good X will increase.
B. the market price of good X will decrease.
C. the demand for good X will decrease.
D. the demand for good X will not change.
17. Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price
of bananas is higher. How would your demand for vanilla pudding be affected by this?
A. It would decrease.
B. It would increase.
C. It would be unaffected.
D. There is insufficient information given to answer the question.
18. A higher price for batteries would tend to
A. increase the demand for flashlights.
B. decrease the demand for electricity.
C. increase the demand for electricity.
D. increase the demand for batteries. .
19. What will happen in the rice market if buyers are expecting higher prices in the near future?
A. The demand for rice will increase.
B. The demand for rice will decrease.
C. The demand for rice will be unaffected.
D. The supply of rice will increase.
20. Holding all else constant, a higher price for ski lift tickets would be expected to
A. increase the number of skiers.
B. decrease demand for skis.
C. decrease the demand for other winter recreational activities.
D. decrease the supply of ski resorts.
21. An increase in the price of a product will reduce the amount of it purchased because:
A. Supply curves are up sloping.
B. the higher price means that real incomes have risen
C. Consumers will substitute other products for the one whose price has risen.
D. Consumers substitute relatively high-priced for relatively low-priced products.

For items 22-25, read each item carefully and identify if correct or incorrect. Choose letter A if it’s TRUE and B if it’s FALSE.
A. TRUE
B. FALSE
22. A market analysis is a quantitative and qualitative assessment of a market.
23. People use price as a parameter to make decisions if all other factors remain constant or equal.
24. Supply is an economic principle referring to a consumer's desire to buy things.
25. Demand is the quantity of a commodity which is offered by a firm or a seller at a particular price during a given period of time.