Name: ___________________________________ Date: _________________

I. Multiple Choice: Choose the letter of the correct answer.

1. What is a state of poverty in which income is insufficient for maintaining a minimum standard of living?
a. absolute poverty b. relative poverty c. virtual poverty d. comparative poverty
2. What is the systematic approach in estimating the strengths and weaknesses of alternatives?
a. cost-benefit analysis b. cost-benefit dimension c. cost- benefit threshold d. external migration
3. What is the term popularized by Gary Becker that refers to the stock of knowledge, habits, social and personality
attributes, including creativity, embodied in the ability to perform labor so as to produce economic value?
a. human capital b. human power c. human mind d. human resource
4. What is the graph of which the cumulative percentage of total national income (or some other variable) is plotted
against the cumulative percentage of the corresponding population (ranked in increasing size of share)?
a. Lorenz Curve b. Gini Coefficient c. Spillover effects d. Wastage
5. What is the number of households having an income below the Poverty Threshold?
a. poverty incidence b. poverty threshold c. poverty trap d. poverty
6. It refers to the economic events in one context that occur because of something else in a seemingly unrelated
context, what is it?
a. spillover effects b. spillover cost c. spillover wastage d. surplus
7. It refers to the additional satisfaction or utility that a person receives from consuming an additional unit of a good
or service, what is it?
a. marginal benefit b. marginal cost c. social cost d. temporal dimension
8. What is the term being used to describe the amount of an asset or resource that exceeds the portion that is
utilized?
a. Scarcity b. Shortage c. Surplus d. Wastage
9. What is the state of an employed person not having enough paid work or not doing work that makes full use of
their skills and abilities?
a. unemployment b. employment c. underemployment d. poverty
10. What is the term being used that states that the loss of potential gain from other alternatives when one alternative
is chosen?
a. opportunity cost b. knowledge capital c. explicit cost d. temporal dimension

II. TRUE OR FALSE: Write A if the statement is correct and B if not.

1. The Law of Demand states that, if all other factors remain equal, the higher the price of a good, the less people will
demand that good.
2. The Law of Supply demonstrates the quantities that will be sold at a certain price.
3. In Law of Supply, producers supply more at a higher price because selling a higher quantity at a
higher price increases revenue.
4. Time is not important to supply because suppliers must, but cannot always, react quickly to a change
in demand or price.
5. When supply and demand are equal the economy is said to be at equilibrium.
6. Disequilibrium occurs whenever the price or quantity is not equal to P* or Q*.
7. Excess supply states that, if the price is set too high, excess supply will be created within the economy and there
will be allocative inefficiency.
8. Excess demand is created when price is set above the equilibrium price.
9. On the demand curve, a movement denotes a change in both price and quantity demanded from one point to
another on the curve.
10. A shift in a demand or supply curve occurs when a good's quantity demanded or supplied changes even though
price remains the same.

III. IDENTIFY: Name the graphs below and describe it briefly. (3pts each)
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5. ____________________________________________________
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IV. ESSAY: Answer the following question briefly.

1. What is the role of education and training in the pursuit of economic prosperity? (5pts)

2. What are the implications of slow adoption of modern technology on the national economy? (5pts)

3. The Pantawid Pamilyang Pilipino Program (4ps) is a conditional cash transfer program that aims to alleviate poverty.
Discuss the positive and negative sides of this policy and state and defend your position for this issue. (10pts)