Department of Education

Region XII
Division Of Sarangani
COLON NATIONAL HIGH SCHOOL
APPLIED ECONOMICS

Name:_________________________________________________Score:________________
Year/Strand:____________________________________________Date:_________________

I. Encircle the letter that best fits the statements or questions given.

1. These are goods that yield satisfaction directly, just like soft drinks and food.
a. Consumer goods b. Capital goods c. Luxury goods d. Economic goods

2. These goods are used in the production of other goods and services.
a. Consumer goods b. Capital goods c. Luxury goods d. Economic goods

3. These goods are used to satisfy the basic needs of man such as food, shelter, and medicine.
a. Essential goods b. Capital goods c. Luxury goods d. Economic goods

4. These goods man may do without, but are used to contribute to his comfort and well-being.
a. Essential goods b. Capital goods c. Luxury goods d. Economic goods

5. These are goods used in the production of other goods and services.
a. Essential goods b. Capital goods c. Luxury goods d. Economic goods

6. This is a good which is both useful and scarce. It has a value attached to it and a price has to be paid for its
use.
a. Essential goods b. Capital goods c. Luxury goods d. Economic goods

7. This is a good that is abundant that there is enough of it to satisfy everyone’s needs without anybody
paying for it.
a. Essential goods b. Capital goods c. Luxury goods d. Free goods

8. This is basically a subsistence economy. A family produces everything that it consumes.

a. Traditional economy b. Command economy c. Market economy d. Mixed Economy

9. The total quantity customers are willing and able to purchase.

a. Demand b. Supply c. Surplus d. Equilibrium

10. These are pair of goods consumed together.

a. Normal goods b. Complementary goods c. Substitute goods d. Normal goods

11. What is it called when you have limited quantities of resources used to meet unlimited wants?
a. Scarcity b. Profit c. Cartel d. Specialization

12. What is the study of economic behaviour and decision making of small units, such as individuals, families,
and businesses called?
a. Microeconomics b. Economics c. Macroeconomics d. Economic statistics

13. What is a market structure in which many companies sell products that are similar but not identical?
a. Monopoly b. Traditional System c. Oligarchy d. Monopolistic Competition

14. Economics is the study of

a. production technology c. how society decides what, how, and for whom to produce
b. consumption decisions d. the best way to run society

15. The Law of Supply states that, "the ________ the price of a good, the _____ that the supplier should sell.
a. lower, more b. higher, more c. lower, less d. higher, less
II. Match the terms in column A with the statements from column B.
_________16. Substitute goods a. Goods that are alternatives to each other.

_________17. Normal goods b. Goods whose demand goes up when the consumer’s income
increases.
_________18. Inferior goods c. Goods whose demand moves in same direction as price.

_________19. Giffen goods d. Goods whose demand falls when the consumer’s income
increases.
_________20. Veblen goods e. Goods whose demand falls when price falls

_________21. Equilibrium f. perfect balance in supply and demand

_________22. Elasticity g. A measure of the responsiveness of one variable to changes in

another variable
_________23. Price Ceiling h. maximum price that sellers may charge for a good, usually set by
government
_________24. Price Floor i. price above equilibrium price that the buyers have to pay

_________25. Mixed Economy j. Combination of two or more economic system.

III. Write True if the statement is correct, and False if it inaccurate.

_________26. Price ceilings are imposed increase price above the free market equilibrium price.

_________27. A command economy decides resource allocation by government planning.

________28. Positive economics studies objective explanations of the workings of the economy.

_________29. An economic model is a physical representation of an economy.

_________30. Supply is the quantity of a good; sellers wish to sell each time the market opens.

_________31. A change in price can cause a shift of a demand curve.

_________32. An increase in price will cause a supply curve to shift to the left.

_________33. The basic characteristic of market economy is that resources are privately owned and
decisions are made by the people themselves.

_________34. Resources satisfy wants.

_________35. Entrepreneurs assume all the risk for the production of a good or service.

IV. Enumeration

Factors of Production Determinants of Elasticity

36. ________________ 44. ____________________
37. ________________ 45. ____________________
38. ________________ 46. ____________________
Determinants Of Supply 47. ____________________
39.________________ 48. ____________________
40. ________________ Types of Economic System
41. ________________ 49. ____________________
42. ________________ 50. ____________________
43. ________________
Consumer Goods are goods that yield satisfaction directly, just like soft drinks and food.
Capital Goods are goods used in the production of other goods and services.
Essential Goods are goods that are used to satisfy the basic needs of man such as food, shelter, and
medicine.
Luxury Goods are those goods man may do without, but are used to contribute to his comfort and well-
being.
Economic Good is a good which is both useful and scarce. It has a value attached to it and a price has to be
paid for its use.
Free Good is a good that is abundant that there is enough of it to satisfy everyone’s needs without anybody
paying for it.
Traditional Economy – This is basically a subsistence economy. A family produces everything that it
consumes.

Command Economy – The means of production are owned by the government. Its decisions are arrived at
by government economic planners.

Market Economy – The basic characteristic of this economy is that resources are privately owned and
decisions are made by the people themselves.

Mixed Economy – a combination of two or more economic system.

Factors affecting the demand curve

Demand - Total quantity customers are willing and able to purchase.

Direct Demand-for consumption goods. Goods and services that satisfy consumer desires.

Derived Demand-These are sometimes called intermediate goods.

Quantity Demanded – amount of a good that the consumer is willing to buy and able to buy at a given price
over a period of time.

Law of Demand - All other things remaining unchanged, the quantity demanded of a good increases when
its price decreases and vice versa.

Complementary goods are a pair of goods consumed together.

Substitute goods are alternatives to each other. As the price of one goes up the demand for the other also
goes up.

Normal goods are those goods whose demand goes up when the consumer’s income increases.

Inferior goods are those goods whose demand falls when the consumer’s income increases.

Giffen goods are those goods whose demand moves in same direction as price

Snob or Veblen goods are those goods whose demand falls when price falls

Law of Supply states that all other factors remaining unchanged the supply of good increases as its price
increases. This can be shown by a supply schedule, a supply curve or a supply function.

Determinants Of Supply

Price
 Cost of production

Technological progress

Prices of related outputs

Govt policy

Equilibrium - perfect balance in supply and demand

A price ceiling is a maximum price that sellers may charge for a good, usually set by government.

A price floor is a price above equilibrium price that the buyers have to pay.

Elasticity: A measure of the responsiveness of one variable to changes in another variable; the percentage
change in one variable that arises due to a given percentage change in another variable.