APPLIED ECONOMICS 11

1st Quarterly examination

NAME: SCORE:
DATE: Teacher: MRS. Jeanidy Vega Agatep

INSTRUCTIONS: Select the correct answer for each of the following questions. Give only one
answer for each item. STRICTLY NO ERASURES ALLOWED.

TEST I. MULTIPLE CHOICE

1. If the price of a good decreases while the quantity of the good exchanged on markets
increases, then the most likely explanation is that there has been.
a. an increase in demand b. a decrease in demand c. an increase in supply
d. a decrease in supply
2. If the price of a good increases while the quantity of the good exchanged on markets
decreases, then the most likely explanation is that there has been.
a. an increase in demand b. a decrease in demand c. an increase in
supply d. a decrease in supply
3. An increase in the demand for a good will cause.
a. an increase in equilibrium price and quantity.
b. a decrease in equilibrium price and quantity.
c. an increase in equilibrium price and a decrease in equilibrium quantity.
d. a decrease in equilibrium price and an increase in equilibrium quantity .
4. An increase in the supply for a good will cause.
a. an increase in equilibrium price and quantity.
b. a decrease in equilibrium price and quantity.
c. an increase in equilibrium price and a decrease in equilibrium quantity.
d. a decrease in equilibrium price and an increase in equilibrium quantity .
5. If a rise in supply exceeds a rise in demand, then we should expect
a. the equilibrium price and quantity levels will rise.
b. the equilibrium price will rise while the equilibrium quantity will decline.
c. the equilibrium price will fall while the equilibrium quantity will rise
d. the equilibrium price and quantity levels will decline.
6. In which instance will both the equilibrium price and quantity rise?
a. when demand and supply increase, but the rise in demand exceeds the rise in supply.
b. when demand and supply increase, but the rise in supply exceeds the rise in demand
c. when demand and supply decline, but decline in the demand exceeds the decline in
supply.
d. when demand and supply decline, but the decline in supply exceeds decline in the
demand.
7. The total quantity of a good or service that all producers are willing to supply at the prevailing
set of relative prices during a defined period of time
a. market supply b. market demand c. equilibrium d. demand
8. The quantity of consumers is willing and able to purchase at various prices during a given
period of time.
a. demand b. supply c. equilibrium d. market supply
9. A situation in which economic forces such as supply and demand are balanced and in the
absence of external influences the values of economic variables will not change.
a. market supply b. market demand c. equilibrium d. demand
10. The demand curve always slopes
a. down and to the right b. straight up and down c. down and to the left
d. up and to the right
11. If a consumer knows that a product will be going on sale this week, how will his/her current
demand be affected?
a. it will go up b. it will go down c.it will stay the same d. none of the above
12. Which of the following best describes the Law of demand?
a. as price goes down, demand goes down (and vice versa)
b. as price goes down, demand goes up (and vice versa)
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 APPLIED ECONOMICS 11
1st Quarterly examination

c. as demand goes down, supply goes up

d. as demand goes up, price becomes elastic.
13. Market equilibrium refers to a situation in which market price
a. is high enough to allow firms to earn fair profit
b. is low enough for consumers to buy all that they want.
c. is at level where there is neither a shortage nor a surplus.
d. is just above the intersection of the market supply and demand curves.
14. The market supply curve shows
a. the effect on market demand of a change in the supply of good or service.
b. the quantity of a good that firms would offer for sale at different prices.
c. the quantity of a good that consumers would be willing to buy at different prices.
d. all of the above are correct.
15. The quantity of consumers is willing and able to purchase at various prices during a given
period of time.
a. demand b. supply c. equilibrium d. market supply
16. Economics came from the greek words
a.ikso and monus b. oikos and nomus c.kios and summon d.kioos and numos
17. This can be defined as the limitation of resources to answer the expanding human wants.
a. wealth b. scarcity c. natures d. resources
18. The things that we need for survival.
a. goods b. needs c. scarcity d.wealth
19. It refers to the satisfying of human wants and provides utility.
a. goods b. needs c. scarcity d.wealth
20. The things that we would like to have.
a. goods b. needs c. scarcity d. wants
21. It implies that the motivation of the process of wealth accumulation is the utilization of
wealth for the individual’s satisfaction and society’s welfare.
a. economics as an applied science
b. economics as study of wealth
c. economics as study making choices
d. economics as a social science
22. It utilizes the scientific method of inquiry from identifying the problem, proposing alternative
tentative answers or hypotheses, testing the tentative answers to the question or the problem at
hand, gathering and treating the data, and answering the question through the conclusion.
a. economics as an applied science
b. economics as study of wealth
c. economics as study making choices
d. economics as a social science
23. Oikos:_______________, Nomus:__________________
a. management : study b. study : household c. household : management
d. management : household
24. It is a term that refers to the value of what you have to give up in order to choose something
else.
a. opportunity cost b. variable cost c. fixed cost d. total cost
25. The studies of human behavior of people in the society on how they make their choices.
a. applied science b. social science c. physical science d. biological science
26. What are the importance of economics.
a. economics analysis provides us with guidelines to wise action and behavior.
b. To prudently evaluate our choices before making a decision.
c. To understand why there is a need to save and invest.
d. To understand why government work hand-in-hand with the private sector.
e. all of the above

27. A compulsory contribution to state revenue, levied by the government on workers’ income
and business profits, or added to the cost of some goods, services, and transactions.
a. minimum wage b. rentals c. taxes d. interest rate
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28. A property from which the owner receives payment from the occupant(s), known as tenants,
in return for occupying or using the property.
a. minimum wage b. rentals c. taxes d. interest rate
29. The minimum amount of remuneration that an employer is required to pay wage earners for
the work performed during the given period.
a. minimum wage b. rentals c. taxes d. interest rate
30. A product that people buy with the hope that they will be beneficial or will generate income
in the future.
a. minimum wage b. investment c. taxes d. interest rate
31. Any payment to an owner or factor of production in excess of the cost needed to bring
that factor into production.
a. minimum wage b. investment c. taxes d. economic
rent
32. A levy assessed on the positive difference between the sale price of the asset and its
original purchase price.
a. percentage tax b. capital gain tax c. taxes d.
interest rate
33. A consumption tax placed on a product whenever value is added at each stage of the
supply chain, from the production to the point of sale.
a. percentage tax b. capital gain tax c. taxes d. value added tax
34. Tax levied by a government directly on an income, especially an annual tax or an
personal tax.
a. income tax b. capital gain tax c. taxes d. value added tax
35. Investments that a company has made that is expected to be converted into cash within
a year.
a. short-term investment b. long-term investment c. investment d. rent
36. When quantity supplied is greater than quantity demanded, you have a_________________.
a. shortage b. surplus c.deficit d. equilibrium
37. All of the following can move the supply curve except.
a. number of seller b. cost of labor c. change in demand d. future price
38. A surplus happens when
a. prices are too low to consumer
b. prices are too high relative to consumer demand
c. prices are too low relative to producer demand
d. prices are too high relative to producer demand
39. The following is a factor that will not cause the demand curve to shift:
a. advertising b. population c. price d. consumer expectations
40. Scarcity guarantees that
a. wants will exceed demands
b. demands will be equal to wants
c. demands will exceed wants
d. most demands will be satisfied
41. The law of demand states that, other things remaining the same, the higher the price of
a good the_________________________.
a. smaller is the demand for good
b. smaller is the quantity of the good demanded
c. larger is the quantity of the good demanded
d. larger is the demand for the good
42. The law of demand states that the quantity of a good demanded varies
a. inversely with its price
b. directly with population
c. directly with income

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1st Quarterly examination

d. inversely with the price of substitute goods

43. Which of the following influences people’s buying plans and varies moving along a
demand curve?
a. preferences b. the price of the good c. income d. the prices of related goods
44. When the quantity demanded equals quantity supplied.
a. the government must be intervening the market.
b. there is a shortage
c. there is a surplus
d. none of the above

45. The equilibrium price in the above figure is?

a.$2 b.$8 c.$4 d.$6
46.The equilibrium quantity in the above figure is?
a.400 units b. 300units c.600units d.200units
47.At a price of $4 in the figure, there is?
a. there is a surplus of 200units
b. the equilibrium quantity is 400units
c. the quantity supplied is 400units
d. there is a shortage of 200units
48. At a price of $10 in the above figure, there is
a. a surplus of 400 units
b. a shortage of 200 units
c. a suplus of 200 units
d. a shortage of 400 units
49. A price below the equilibrium price results in
a. a further price fall b. a shortage c. excess supply d. a surplus
50. A shortage causes the
a. supply curve to shift rightward
b. price to rise
c. price to fall
d. demand curve to shift leftward

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