LYCEUM OF THE PHILIPPINES UNIVERSITY - CAVITE CAMPUS

COMPREHENSIVE QUIZ - BASIC AND PRINCIPLES OF ECONOMICS (FINAL PERIOD)

NAME :
COURSE :

DATE:

TEST. 1 IDENTIFICATION: AS MUCH AS POSSIBLE, KINDLY AVOID ERASURES. PRINT

YOUR ANSWER ON THE SPACE PROVIDED.
1. It is the study of peoples behavior as they make choices to satisfy their wants;
ECONOMICS
2. What people would buy if their incomes were unlimited? WANTS
3. The assumptions that people do not intentionally make decisions that would leave
them worse off; RATIONALITY ASSUMPTIONS
4. A situation in which the economic resources for producing goods and services are
insufficient to satisfy all wants; SCARCITY
5. Inputs used to produce goods and services; FACTORS OF PRODUCTION
6. Anything from which individuals derive satisfaction or happiness and are thus
valued; GOODS
7. The factor of production involving human resources that perform the functions of
raising capital, organizing, managing,, assembling other factors of production, and
making basic business policy decisions; ENTREPRENEUR
8. All manufactured resources, including buildings, equipment, machines, and
improvements to land that is used for production; CAPITAL
9. Productive contributions of humans who work, involving both mental and physical
activities; LABOR
10. The natural resources that are available from nature. LAND as a resource includes
location, fertility and mineral deposits, etc.
11. Any goods or services that are scarce; ECONOMIC GOODS
12. Things purchased by consumers that do not have physical characteristics;
SERVICES
13. A curve representing all possible combinations of total output that could be
produced assuming (1) a fixed amount of productive resources of a given quality and
(2) the efficient use of those resources; PPF
14. An abstract concept concerning all of the arrangements that individuals have for
exchanging with one another; MARKET
15. There is a negative, or inverse relationship between the price of any good or
service and the quantity demanded, holding other factors constant; LAW OF DEMAND
16. The principle that consumers and producers shift away from goods and resources
that become relatively higher priced in favor of goods and resources that are now
relatively lower priced; PRINCIPLE OF SUBSTITUTION
17. The value of your money income in buying goods and services. If your money
income stays the same but the price of one good that you are buying goes up, your
effective purchasing power falls; PURCHASING POWER
18. Two goods are_____ when either one can be used for consumption; SUBSTITUTE
19. The use of goods and services for personal satisfaction; CONSUMPTION
20. Any activity that results in the conversion of natural resources, human resources,
and other resources into goods and services that can be used in consumption;
PRODUCTION
21. An economic system based on individuals goodwill toward others, not on their
own self- interest, and in which, in principle, society decides what, how, and for
whom to produce; SOCIALISM
22. Quantity limits on import;
23. The value of the things individuals own less the value of what they owe;
24. Goods that can be used in place of one another; SUBSTITUTE
25. A social insurance program that provides financial benefits to the elderly and
disabled and to their eligible dependents and survivors;
26. A tax that discourages activities that society believes are harmful (sinful); SIN TAX
27. She heads the Bureau of Internal Revenue; KIM HENARES
28. The present Supreme Court Chief; MARIA LOURDES SERENO
29. The 14th President of the Republic of the Philippines; GLORIA MACAPAGAL
ARROYO
30. The present Governor of the Bangko Sentral ng Pilipinas ;
AMANDO M. TETANGCO JR.
32. Factor market in which individuals supply labor services for wages to other
individuals and to firms that need labor services; The act of combining two firms;

LABOR MARKET
33. Group of individuals living together and making joint decisions; HOUSEHOLDS
34. A relationship between two variables in which when one goes up, the others go
down; CORRELATION
35. An economic system based on the market in which the ownership of the means of
production resides with a small group of individuals called capitalist; CAPITALISM
II. Multiple choice. ENCIRCLE YOUR ENTIRE ANSWER.
1. Options among which to make choices;
A. Alternatives
B. Benefit
C. Incentives
2. The ability to produce something with fewer resources than other producers would
use to produce the same thing;
A. Absolute advantage
B. Comparative advantage
C. Alternatives
3. The part of a nation's balance of payments that deals with merchandise (or visible)
imports or exports;
A. Alternatives
B. Absolute advantage
C. Balance of trade
4. The part of a nation's balance of payments that deals with merchandise (or visible)
imports or exports;
A. Barter
B. Exchange
C. All of the above (BONUS)
5. The gain received from voluntary exchange;
A. Exchange
B. Benefit
C. Trade
6. A certificate reflecting a firm's promise to pay the holder a periodic interest
payment until the date of maturity and a fixed sum of money on the designated
maturity date;
A. Barter
B. Bond
C. Benefit
7. A financial institution accepts checking deposits, holds savings, sells traveler's
checks and performs other financial services;
A. Hospital
B. Pawnshop
C. Banks
8. A model of an economy showing the interactions between households and business
firms as they exchange goods and services and resources in markets;
A. Vicious cycle
B. Circular flow of economic activity
C. 6 cycle mind
9. A mode of economic organization in which the key economic functions--what,
how, and for whom--are principally determined by government directive. Sometimes
called a "centrally planned economy.";
A. Capital economy
B. Command economy
C. Market economy
10. In monetary theory, the use of someone else's funds in exchange for a promise to
pay (usually with interest) at a later date. The major examples are short-term loans
from a bank, credit extended by suppliers, and commercial paper. (2) In balance-ofpayments accounting, an item such as exports that earns a country foreign currency;

A. Debit
B. Bond
C. Credit
11. Goods made by people and used to produce other goods and services. Examples
include buildings, equipment, and machinery;
A. Capital resources
B. Cost of production
C. Manufacturing resources
12. The purchase of consumer goods and services;
A. Cost of production
B. Consumer spending
C. Cost
13. The effort of two or more parties acting independently to secure the business of a
third party by offering the most favorable terms;
A. Complement
B. Competition
C. Coordination
14. Anything of value that is acceptable to a lender to guarantee repayment of a loan;
A. Complement
B. Collateral
C. Competition
15. All resources used in producing goods and services, for which owners receive
payments;
A. Cost of spending
B. Cost of production
C. Consumption cost
III. Fill-in-the-blanks.
1. A FIRMS is an organization that transforms resources (inputs) into products
(outputs). Firms are the primary producing units in a market economy;
2. An ENTREPRENEUR is a person who organizes, manages, and assumes the risks
of a firm, taking a new idea or a new product and turning it into a successful business;
3. HOUSEHOLDS are the consuming units in an economy;
4. The CIRCUAR FLOW of economic activity shows the connections between firms
and households in input and output markets;
5. INPUT markets are the markets in which resourceslabor, capital, and land
used to produce products, are exchanged;
6. The LABOR market, in which households supply work for wages to firms that
demand labor;
7. The FACTOR MARKET , in which households supply their savings, for interest or
for claims to future profits, to firms that demand funds to buy capital goods;
8. The LAND market, in which households supply land or other real property in
exchange for rent;
9. A DEMAND SCHEDULE is a table showing how much of a given product a
household would be willing to buy at different prices;
10. DAMAND CURVE are usually derived from demand schedules.

IV. GENERAL INFORMATION.

1. Quantity responds enormously to changes in price ( = );
A. Perfectly inelastic
B. Inelastic
C. Perfectly elastic
2. The % in quantity exceeds the % in price (>1);
A. Perfectly elastic
B. Elastic
C. Perfectly inelastic
3. The % in quantity is the same as the % in price (=1);
A. Elastic
B. Inelastic

C. Unit elastic
4. The % in quantity is less than the % in price (<1);
A. Unit elastic
B. Inelastic
C. Elastic
5. Quantity does not respond at all to changes in price (=0).
A. Perfectly elastic
B. Perfectly inelastic
C. Elastic
6. The collection of institutions, laws, activities, controlling values, and human
motivations that collectively provide a framework for economic decision making;
A. Economic activity
B. Economic system
C. Economic theories
7. The market clearing price at which the quantity demanded by buyers equals the
quantity supplied by sellers;
A. Exchange rate
B. Equilibrium price
C. Demand surplus
8. Trading goods and services with others for other goods and services or for money
(also called trade). When people exchange voluntarily, they expect to be better off as
a result;
A. Transition
B. Exchange
C. Merging
9. The roles played by money in an economy. These roles include medium of
exchange, standard of value, and store of value;
A. Functions of money
B. Values of money
C. Present value
10. Individuals and family units which, as consumers, buy goods and services from
firms and, as resource owners, sell or rent productive resources to business firms;
A. Households
B. Human capital
C. Human resources
11. Factors that motivate and influence the behavior of households and businesses.
Prices, profits, and losses act as incentives for participants to take action in a market
economy;
A. Increment
B. Incentives
C. Discounts
12. Normative economics considers "what ought to be"--value judgments, or goals, of
public policy. Positive economics, by contrast, is the analysis of facts and behavior in
an economy, or "the way things are." BONUS
A. Positive economics
B. Normative economics
C. Macroeconomics
13. Manufactured items used to produce goods and services.
A. Finish goods
B. Physical capital
C. Economic goods
14. The difference between total revenues and the full costs involved in producing or
selling a good or service; it is a return for risk taking;
A. Revenue
B. Profit
C. Increment

15. The amount of a product consumers will purchase at a specific price;

A. Quantity supply
B. Quantity demand
C. Supply surplus
16. Occurs when individuals, businesses, and the economy as a whole do not consume
all of current income (or output);
A. Save
B. Savings
C. Bonus
17. A tax on an imported good;
A. Quota
B. Tariff
C. Taxes
18. The situation in which people are willing and able to work at current wage rates,
but do not have jobs;
A. Employment
B. Unemployment
C. Labor incentives
19. Required payments of money made to governments by households and business
firms;
A. Tax
B. Taxes
C. Tariffs
20. Employment of people in jobs to make goods or services;
A. Wages
B. Work
C. Production
21. A mode of economic organization which borrows economic decisions made at an
earlier time or by an earlier generation;
A. Command economy
B. Traditional economy
C. Capitalism
22. An international agreement on conditions of trade in goods and services;
A. Trade
B. Trading agreement
C. International alliance
23. One of the functions of money allowing people to save current purchasing power
to buy goods and services in a future time period;
A. Standard of value
B. Store of value

C. Future value
24. The situation resulting when the quantity demanded exceeds the quantity supplied
of a good or service, usually because the price is for some reason below the
equilibrium price in the market;
A. Surplus
B. Shortage
C. Scarcity

25. Payments received by businesses from selling goods and services.

A. Profits

B. Revenues

C. Sales gap

26. It is a decree granting land holders with one year to secure legal titles to their
land. Failure in doing so will result to forfeiture of their land;
a. RA# 3844

b. Commonwealth Act # 103

c. Spanish Decree of 1894

27. A republic act created to finance the agrarian reform program o f the government;
a. RA# 6390

b. PD #2

c. EO# 229

d. Spanish decree of 1894

28. A decree joining all landholders, whether the caciques or peasants to secure their
legal titles;
a. PD#2

b. EO# 229

c.RA#6390

d. Panish decree of 1880

29. A public land act that became effective on July 26, 1904 offering homestead plots
not in excess of 16 hectares to families who have occupied and cultivated the land
they were residing since August 21, 1898;
A. Spanish decree of 1880
B. Spanish decree of 1889
C. Public land act of July 1, 1902
D. Commonwealth act No. 213
E. Republic act No. 1160 of 1954

V. IDENTIFICATION.

30. This acts regulate tenancy share contracts by establishing minimum

standards of 50-50 crops sharing;
ACT NO. 4054, THE RICE SHARE TENANCY ACT OF 1933
31. There are scarcity of resources because; MAN WANTS ARE UNLIMITED
32. The law of demand states that, when the price goes up, the quantity
demanded goes down; THERE IS AN INVERSE RELATIONSHIP BETWEEN THE
PRICE OF A GOOD AND THE QUATITY OF THE GOOD DEMANDED
33. Assume that Virgin Cola and RC Cola are substitutes. A rise in the price of
Virgin Cola will have which of the following effects on the market of RC?
A RIGHTWARD SHIFT IN THE RC DEMAND CURVE
34. Assume that coffee and sugar are complementary goods. The effect on the
sugar market of an increase in the price of coffee (other things being equal)
would best be describe as; DECREASE IN THE DEMAND FOR SUGAR
35. The theory of supply state that;
6

THERE IS A POSITIVE RELATIONSHIP BETWEEN THE PRICE OF A GOOD AND

THE QUAITY OF IT BEING OFFERED FOR SALE BY SUPPLIERS
36. When the supply curves slope move upward this means that; THERE IS A
INCREASE IN PRICES PROVIDING PRODUCERS WITH A HIGHER PROFIT
INCENTIVES THAT NEEDED TO INCREASE THE QUATITY SUPPLIED
37. Market equilibrium is defined as; THE CONDITION IN WHICH THERE IS
NEITHER A SHORTAGE OR SURPLUS
38. Revised value added tax has a uniform rate of? 12%
39. Charge or fee that government collects from individuals and organization
under its jurisdiction; TAXES
40. The decree which reiterated the abolition of share tenancy and declared
the whole country as a land reform area; PD2
41. Republic Act 6657 is also known as; CARP
41. When total cost is greater than the total revenue; LOSS
42. Results when total revenue is equal to total cost; BREAK-EVEN
43. The incumbent secretary of Department of Agrarian Reform;
VIRGILIO R. DELOS REYES
44. Its is the value of what is foregone in order to have something else;
OPPORTUNITY COST
45. Another name given to equilibrium; BALANCE
46. It reflects the desire of the consumers for a commodity; DEMAND
47. Income received by an entrepreneur; PROFIT
48. Income receive by capitalist; INTEREST
49. Goods that satisfies mans wants; ESSENTIAL GOODS
50. A social science that aims to answer scarcity; ECONOMICS
51. What people would buy if their income is unlimited? WANTS
52. Total amounts or quantities is closely related to; AGGREGATES
53. Those alternatives that exist for any given activity for use of income or
time; SUBSTITUTION OPTION
54. A situation in which the ingredients for producing the things that people
desire are insufficient to satisfy all wants; SCARCITY
55. It is the inputs use to produce goods and services; RESOURCES
56. The natural resources that is available from nature; LAND
57. All manufactured resources, including buildings, equipment, machines, and
improvement to land is used for production; CAPITAL
58. Any things from which individuals derive satisfaction of happiness and are
thus valued; GOODS
59. Any goods or services that is scarce; ECONOMIC GOODS
60. The present Commissioner of the BIR; KIM HENARES
61. He is the present Bangko Sentral ng Pilipinas governor; AMANDO M.
TETANGCO JR.
62. At any given price, quantity demanded can change infinitely; PERFECTLY
ENELASTIC
63. The responsiveness of demand/supply to a change in its determinants;
ELASTICITY
64. Tax imposed on the right of the deceased person to transmit his/her
estate; EXCISE TAX
65. Under this principle movables follow the law person. MOBILLA
SEQUNTUR PERSONAN
66. Tax imposed on income from the sale of stocks, bonds or real estate is;
CAPITAL GAIN TAX
67. This refers to income such as interest on bank deposits, dividends,
royalties, prizes and other winnings; PASSIVE INCOME
68. It is the use of the taxpayer of illegal and or fraudulent means to defeat or
lessen the amount of tax; TAX EVASION
69. The excess of income over revenue; PROFIT
70. The amount received by a seller from the sale of goods or commodity
item/s; REVENUE
71. Role of taxes in the economy; RAISE REVENUE FOR GOVERNMENT
SPENDING, IT CONTROL THE VOLUME OF IMPORTED GOODS; STABILIZE OUR
ECONOMY

72. Not a passive income of an individual; SALARY

73. Tax imposed on income earned by corporation engaged in trade or business;
CORPORATION TAX
74. A business tax imposed and collected from the seller of services in the
course of trade or every business transactions;
ADD VALOREM OR VALUE ADDED TAX
75. Tax derived from compensation of every resident citizen of the Philippines;
INCOME TAX
76. It includes both explicit and implicit costs; TOTAL REVENUE
77. A fee imposed by the government on income, wealth, property, and profit
of persons and businesses; TAX
78. Additional revenue that the firms earns from each additional unit of output
sold; MARGINAL REVENUE
79. The basis of economics for Agrarian reform; INCREASING EFFICIENCY;
PROMOTING EQUALITY, INCREASING INCOME
80. One of the character of an Agricultural economy; LOW PRODUCTIVITY
81. Refers to the rise in the general price level over time; INFLATION
82. Measures the value of all final goods and services that are produced in an
economy over a given period of time; GROSS DOMESTIC PRODUCTS
83. Refers to those people who are part of the labor force but cannot find
work; UNEMPLOYMENT
84. A countrys labor force includes people that are; WORKING, ENGAGED IN
BUSINESS, ARE NOT WORKING BUT ACTIVELY LOOKING FOR WORK
85. The sum of GDP and net factor income from abroad; GNP
86. The belief that people should be taxed according to their ability to pay,
regardless of the benefits they receive; ABILITY TO PAY PRINCIPLE
87. The ability to produce more units of a good or service than some other
producer, using the same quantity of resources; ABSULUTE ADVANTAGE
88. A schedule (or graph) that shows the value of output (real GDP) that would
be demanded at different price levels; AGGREGATE DEMAND
89. A schedule (or graph) that shows the value of output (real GDP) that would
be produced at different price levels. In the long run, the schedule shows a
constant level of real GDP at all price levels, determined by the economy's
productive capacity at full employment. In the short run, the aggregate supply
schedule may show different levels of real GDP as the price level changes;
AGGREGATE SUPPLY
90. Something of monetary value owned by an individual or an organization;
ASSET
91. Total cost (TC) divided by the amount produced; AVERAGE COST
92. Total fixed costs divided by the amount produced; AVERAGE FIXED COST
93. Total revenue divided by the amount produced; AVERAGE REVENUE
94. The percentage of overall income that is paid in taxes; AVERAGE TAX
RATIO
95. Total variable costs divided by the quantity produced; AVERAGE VARIABLE
COST
Problem Solving :

97
89
81
73
66
58
50

100
200
300
400
500
600
700

TR

MR

MC

AC

TC

(PXQ)

(TR/Q)

(TC/Q)

(TC/Q)

(AC) (Q)

PROFIT/
LOSS
TR-TC

9700
17,800
24,300
29,200
33,000
34,800
35,800

81
65
49
38
18
10

16
14
15
41
35
70

100
58
43
36
37
37
41

10,000
11.600
13,000
14,400
18,500
22,000
29,000

-0.32
0.01
0
0
0
0
0

Questions:
1.
2.
3.
4.
5.

Do we have profit-maximizing level of output for the firm?

At what output will MR=MC?
At what price will the company experience loss?
At what output level will the firm experience break-even?
How much is the firms profit at a price of P66.00?