Republic of the Philippines

Department of Education
Region III
CUYAPO NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Bulala, Cuyapo, Nueva Ecija

THIRD QUARTER TEST

APPLIED ECONOMICS

Name: ________________________________ Score: _________________

Section: __________________ Date: __________________

I. Directions: Read each statement carefully. Choose the letter of the correct answer and write it on the space provided
before the number.
________ 1. It is a social science that deals with how people themselves in order to allocate scarce resources in order to
produce goods and services that will satisfy the unlimited and multiplying wants and need of man.
a. Wants b. Needs c. Economics d. Microeconomics
________ 2. It refers to the value of the best forgone alternative.
a. Opportunity Cost b. Labor c. Decision- Making d. Scarcity
________ 3. Known as factors of production, are the resources used to produce goods.
a. Economic Resources b. Economics c. Macroeconomics d. Capital
________ 4. A condition where there are insufficient resources to satisfy all the needs and wants of a population.
a. Assumption b. Scarcity c. Limitations d. Production
________ 5. Man-made resources used in the production of goods and services, which include machineries and
equipment.
a. Labor b. Land c. Product d. Capital
________ 6. Deals with the economic behavior of the individual units such as consumers, firms, the owners of factors of
production.
a. Macroeconomics b. Microeconomics c. Consumption d. Distribution
________ 7. Decisions are based on traditions and practices upheld over the years and passed on from generation to
generation.
a. Command b. Market c. Traditional Economy d. Economic System
________ 8. Concerned with the process of setting prices of goods.
a. Price Theory b. How to Produce c. Decisions d. Allocation
________ 9. The market value of final products, both sold and unsold, produced by the resources of the economy in a
given period.
a. GNP b. GDP c. Commodity d. Price
________ 10. The authoritative system wherein decision-making is centralized in the government or a planning committee.
a. Traditional Economy b. Command Economy c. Market Economy d. Price Theory
________ 11. Deals with the economic behavior of the whole economy.
a. Traditional Economy b. Command Economy c. Market Economy d. Macroeconomics
________ 12. The most democratic form of economic system.
a. Market Economy b. Traditional Economy c. Economic System d. Macroeconomics
________13. ____________ is when supply is limited.
a. Scarcity b. Absolute Scarcity c. Decision- Making d. Opportunity Cost
________ 14. Soil and natural resources that are found in nature and are not man-made.
a. Labor b. Land c. Product d. Capital
________ 15. Physical and human effort exerted in production.
a. Labor b. Land c. Product d. Capital
________ 16. It is a market value of final products produces within the country.
a. GNP b. GDP c. Commodity d. Price
________ 17. It is the use of inputs to produce outputs.
a. Decisions b. Allocation c. Production d. Outputs
________ 18. Commodities or services that are used to produce goods and services.
a. Allocation b. Production c. Outputs d. Inputs
________ 19. The different goods and services which come out of the production process.
a. Decisions b. Allocation c. Production d. Outputs
________ 20. Interaction between buyers and sellers of trading or exchange.
a. Market b. Production c. Outputs d. Product
________ 21. Concerned with government expenditure and revenues.
a. Market b. Production c. Public Finance d. Allocation
________ 22. The allocation of the total product among members of the society.
a. Production b. Distribution c. Market d. Allocation
________ 23. The use of a good or service.
a. Production b. Distribution c. Market d. Consumption
________ 24. The most common type of market because it is where we buy consumer goods.
a. Household Economics b. Market c. Demand d. Good Market
________ 25. Where workers offer services and look for jobs, and where employers look for workers to hire.
a. Labor Market b. Financial Market c. Supply d. Demand
________ 26. The willingness of a consumer to buy a commodity at a given price.
a. Labor Market b. Financial Market c. Supply d. Demand
________ 27. Which includes the stock market where securities of corporations are traded.
a. Labor Market b. Financial Market c. Supply d. Demand
________ 28. Most common use of economics is for the family.
a. Market b. Household Finance c. Public Finance d. Allocation
________29. A situation wherein the amount of something available is insufficient to satisfy the desire for it.
A. Scarcity b. Resources c. Capital d. Opportunity Cost
________30. A demand curve can shift because of changing.
A. Incomes b. Prices of related goods c. tastes d. all of the above
________ 31. The things used to make other goods.
a. Scarcity b. Economics c. Resources d. Demand
________ 32. Things we must have to survive.
a. Scarcity b. Needs c. Wants d. Market
________ 33. Things we would really like to have.
a. Scarcity b. Needs c. Market d. Wants
________ 34. Investing time, natural resources, labor and capital are all risks associated with production.
a. Capital b. Labor c. Land d. Entrepreneurship
________ 35. Company that makes goods and/or deliver services.
a. Producer b. Consumer c. Capital d. Company
________ 36. Economics is a social science because it deals with:
a. Human Nature b. Natural Resources c. Experimentation d. Plants & Animals
________ 37. As a social Science, Economics can be more:
a. Predictable b. Unpredictable c. Changeable d. All of these
________ 38. Economics is derived from the Greek word “Oikonomia”.
a. Economic management b. Household Management c. Capital d. None of these
________ 39. Scarcity of resources means.
a. Minimum resources b. Shortage of resources c. Slight resources d. None of these
________ 40. Unlimited wants means:
a. Infinite b. Limited c. Partial d. None of these
________41. Which law of economics states that “The higher the price of a product, the higher amount of product a
company will produce to sell (the higher amount of supply.”
a. Law of supply b. Law of Demand c. Market Equilibrium d. None of these
________42. Which law of Economics states that “The lower the price of a product, the more of that product people will buy
(the more demand it has from people).”
a. Law of supply b. Law of Demand c. Market Equilibrium d. None of these
________43. It refers to the price-quantity pair where the quantity demanded is equal to the quantity supplied.
a. Law of supply b. Law of Demand c. Market Equilibrium d. None of these
________44. The situation in which limited resources are being used most effectively is called:
a. Efficient b. Abundant c. Economic d. Scarce
________45. It deals with what is things that are actually happenings such as inflation rate, the number of employed labor
and the level of GNP
a. Positive Economics b. Normative Economics c. MacroEconomics d. Microeconomics
________46. It refers to what should be-that which embodies the ideal rate of population growth:
a. Positive Economics b. Normative Economics c. MacroEconomics d. Microeconomics
________47. It is the application of economic theory and econometrics in specific settings with the goal of analysing potential
outcomes.
a. Positive Economics b. Negative Economics c. Applied Economics d. Microeconomics
________48. It is a measure of how much buyers and sellers respond to changes in market conditions.
a. Adaptability b. Elasticity c. Complexity d. None of these
________49. It is a rivalry among various sellers in the market.
a. Competition b. Cooperation c. Negotiation d. None of these
________50. It exists when a single firm that sells in that market has no substitutes.
a. Oligopoly b. Competition c. Monopoly d. None

Thank you and Good luck!

Prepared by: Checked by: Noted:

RAUL S. CABANTING LEONIDA H. ZAMORA ANGELITA L. DELA FUENTE
SHS Teacher Assistant Principal II Principal IV
 Republic of the Philippines
Department of Education
Region III
CUYAPO NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Bulala, Cuyapo, Nueva Ecija

THIRD QUARTERLY TEST

APPLIED ECONOMICS
ANSWER KEY

I.

1. c 16. b 31. c
2. a 17. c 32. b
3. a 18. d 33. d
4. b 19. d 34. d
5. d 20. a 35. a
6. b 21. c
7. c 22. b
8. a 23. d
9. a 24. d
10. b 25. a
11. d 26. d
12. a 27. b
13. b 28. b
14. b 29. a
15. a 30. D

II.

1. MAR 11. TRAD

2. COM 12. MAR
3. TRAD 13. COM
4. MAR 14. MAR
5. COM 15. COM
6. TRAD
7. TRAD
8. MAR
9. MAR
10. TRAD

Relationship between Supply, Demand and Price

Law of Demand

“The lower the price of a product, the more of that product people will buy (the more demand it has from
people).”

The Law of Demand. Digital image. N.p., n.d. Web. 23 Jan. 2013.
From the graph above, we can see that as the quantity increases, the price goes up. The quantity of a
product that consumers buy at a higher price is less. This is because when the price increases, the
opportunity cost of buying that product goes up too. People will then avoid buying product that will force
them to forgo the consumption of something else they value more.

To make it easier to understand about the law of demand, just think logically and remember: More sales
may be encourages if the price of a product reduces, and increasing the price of product can cause
lower amount of sales. And one last important thing about it is that the curve of the graph in law of
demand is a downward slope.
Law of Supply

“The higher the price of a product, the higher amount of product a company will produce to sell (the
higher amount of supply).”

The Law of Supply. Digital image. N.p., n.d. Web. 23 Jan. 2013.
According to the graph above, we can see that the price increases with the quantity of a product. A
business produces goods or services to earn profit. So, if the price of a product is higher, the business
may get more profit. To understand this law in an easier way, just imagine that you are a supplier and
what can you do to earn more money from your business. And always keep in mind, the curve of the
graph in law of demand is an upward slope.
How Supply, Demand and Price Relate to Each Other?
A real life example: (Article)

Platinum Prices Rise over Gold on Supply, Demand Concerns

Other example:

Imagine that you are an owner of a business of producing and selling bottles. According to your survey
and investigation, you data analysis has shown that people would buy your bottles if the price are lower
than $10. Therefore, you set the price of your bottles at $10, and the quantity of the product you have
ordered to produce is 100 bottles. However, there are 200 people demanded for the bottles, which
means your quantity of product is lower than the demand from people. In this case, according to the law
of demand, as the demands goes up so does the price. At the same time, the rise of price encourages
more bottles to be produced and supplied, according to the law of demand.

But what if the demands remain 200 people even though you have produced 300 bottles? The price will
not increase because the supply is more than the demand. After the 200 people bought the bottles from
you, the price for the 100 bottles left will be decreased, because at this circumstance your goal is just to
sell out the remaining 100 bottles. You cannot aim to get more profit from them because your 200
customers already had the bottles, which mean your demand has reached the point where it starts to
close up. Lower price of the remaining bottles will then attract the people who previously think that the
price of $10 per bottles is too high for them.

What is Market Equilibrium?

A market equilibrium refers to the price-quantity pair where the quantity
demanded is equal to the quantity supplied. The market equilibrium
representation is possible when the market supply and the market demand
intersect, keeping all other things constant.