Baler Institute

Baler, Aurora
3200

FIRST QUARTER EXAMINATION

APPLIED ECONOMICS
ABM/GAS 12
S.Y 2021-2022

Name:_______________________________ Date:_________________
Grade& Section:________________________ Ratings:_______________

Direction: Choose the letter of the correct answer. Encircle your answer.

1. The economists describe the amount of resources in an economy as:

a) Always constant c) Unlimited at any moment in time

b) Can never decrease or increase d) Limited at any moment in time

2. The fundamental economic problem that must be solved efficiently

a) Scarcity of resources c) Surplus of demands

b) Health system d) Export policies

3. Economists point out that scarcity must be addressed to protect the

a) The poor but not the rich c) Neither the poor nor the rich

b) Both the poor and the rich d) The poor but never the rich

4. What two factors contribute to scarcity in the production of goods and services?

a) Unlimited resources and limited wants c) Unlimited wants and limited resources

b) Unlimited resources and wants d) Limited resources and wants

5. In the market, the price elasticity for the demand of canned goods sold by
Aling Puring Grocery Store is the:
a) ratio of the percentage change in quantity demanded for the goods to the
percentage change in its price
b) responsiveness of revenue to a change in quantity of the canned goods
c) ratio of the change in quantity demanded divided by the
change in its price of the canned goods
d) response of revenue to a change in the price
6. If demand for sacks of rice in Aling Puring Grocery Store is price elastic, then a:
a) rise in the price of sacks of rice will raise total revenue of the grocery
b) fall in the price of sacks of rice will raise total revenue of the store
c) fall in the price of sacks of rice will lower the quantity demanded
d) fise in the price of sacks of rice won't have any effect on total revenues

7. If the cross-price elasticity between soap bar and liquid soap commodities is 1.5,
a) the two goods are luxury goods
b) the two goods are complements
c) the two goods are substitutes
 d) the two goods are normal goods
8. The price elasticity of demand for a certain good tends to be:
a) smaller in the long run than in the short run
b) smaller in the short run than in the long run
c) larger in the short run than in the long run
d) unrelated to the length of time
9. If the price elasticity of supply of cup noodles is 0.60 and the price increase by
3 percent, then the quantity supplied for cup noodles increases by how by?
a) 0.60 percent. c) 1.8 percent
b) 0.20 percent d) 18 percent
10. The market supply curve for gasoline shows the
a. effect on market demand of a change in the supply of gasoline.
b. quantity of gasoline that firms offer for sale at different prices.
c. quantity of gasoline that consumers are willing to buy at different prices.
d. All of the above are correct.
11. If Toyota firm is producing a car faster than people want to buy, there is
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.
12. An increase in the price of electricity bill will force you to:
a. increase your demand for kerosene heaters and coal.
b. increase your demand for light bulbs and aircon.
c. increase your demand for stereos and videokes.
d. increase your demand for TVs and use of gadgets.
13. The market demand curve for apple shows the
a. effect on market supply of a change in the demand for apple
b. quantity of an apple that consumers like to buy at different prices.
c. marginal cost of producing and selling different quantities of an apple.
d. effect of advertising expenditures on the market price of an apple.
14. Economies experience an increased in unemployment and a reduced of
activity during recession. How does recession affect the market demand for new
cars?
a. Demand for new cars shifts to the right.
b. Demand for new cars shifts to the left.
c. Demand for new cars has no shift
d. Demand for new cars either has or no shift

15. Which is true on the value of an economic theory in practice? It is determined by_______.

a. how accurate the assumptions are.

b. how well the theory can be represented by a graph.
c. how well the theory can predict or explain.
d. how economical the model is.
16. Which of the following is the study of the aggregate economy studied as a whole?
a. Mathematical economics c. Macroeconomics
b. Econometrics d. Microeconomics
17. Business ethics refers to any behavior by businesses that may ________.
a. be illegal.
b. violate social or moral standards.
c. result in the maximization of profits.
d. All of the above.

18. Businesses have responded to incentives for ethical behavior by doing ALL except
a. lobbying for the abolition of laws that require ethical behavior.
b. appointing “ethics officers” to monitor ethical manners of employees.
c. providing training sessions in ethical behavior for employees.
d. establishing codes of ethical behavior for employees.
19. Which of the following is not an economic agent in your locality?
a. Producer b. Consumer
 c. Public Sector d. None of ABC
20. Mrs Nenita De Jesus purchased basic goods like vegetables and groceries for
the consumption of her family. These goods are:
a. Consumers goods c. Luxury Goods
b. Capital Goods d.EconomicGoods

21. Mr. Dennis Elecanal purchased new car as a gift for his father’s birthday. This
good is
a. Consumers Good c. Capital Good
b. Luxury Good d. Economic Good
22. ABM Computer shop purchased additional 10 units of computer for the business.
These goods are called:
a. Consumers goods c. Capital Goods
b. Luxury Goods d. Economic Goods
23. Which is not considered as tangible good?
a. Cell phone c. Sack of rice
b. Mask d. Training service
24. Which is true about Economics as a social science?
a) Scarce resources and limited needs drive choice
b) Economics explains and predicts economic events
c) The scientific method is based on the normative analysis
d) Economic hypotheses lead directly to predictions https
25. The physical effort of the manpower to produce the basic needs of the consumers, describes which factor of
production?
a) Land c) Labor
b) Capital d)Entrepreneur
26. The initiative and creativity to produce something new describes which factor of production?
a) Land c) Labor
b) Capital d) Entrepreneur

27. The equipment of the coffee shop to produce cups of coffee, are what kind of goods or products?

a) Consumer goods c) Capital goods

b) Either consumer goods or capital goods d) Economic goods

28. Which best of the following best describes economics as a social and an applied science?
a) The study of products we need to survive
b) The study of how customers make choices when there is unlimited supply of resources
c) The study of human personalities
d) The study of how buyers make choices when there is limited supply

29. The following are examples of customers’ basic needs.

a) Water and shelter
b) Iced tea
c) Laptop and cellular phones
d) Expensive bags

Directions: Read the sentences carefully. Write TRUE if the statement is correct
and FALSE if the statement is incorrect.

__________1. Elasticity of demand refers to the change in demand when there is a

change in another factor such as price or income
__________2. If demand for a good or service is static even when the price changes,
demand is said to be inelastic
__________3. Examples of elastic goods include gasoline, while inelastic goods are
items like canned goods and vitamin c tablets
__________4. The law of demand states that “elasticity shows how much a good or
service is demanded relative to its movement in price”.
__________5. Inelastic demand is when a demanded quantity for masks changes
by a greater percentage compared to its percentage change in price
__________6. The opposite of a market economy is a planned economy, where
investment and production decisions are decided by the government.

FILL IN THE BLANKS.

Directions: Read the sentences and fill in the blanks.
1. The ______________________________________ explain the interaction
between the sellers of a resource and the buyers for that resource.
2. The __________________________ states that, higher the price, the higher
the quantity supplied.
3. A movement refers to a change along a _________________.
4. A shift in a demand or supply curve occurs when a good's quantity
demanded or supplied changes even though price remains
__________________________.
5. When Supply and demand are balanced, it is called ____________________.
6. The _______________________________________states that ―the higher the
price, the lower the quantity demanded‖.
7. Unit elastic is when a ______________change in demand equals the
price.
8. A mango fruit with an elastic demand gets more _________when its
price drops slightly. When its price goes up, it stays longer in the box.
9. The demand _________shows how quantity demanded for apple
responds to price changes. The flatter the curve, the more elastic is the
demand for an apple.
10. The midpoint elasticity is ___________than 1.

ESSAY (5 POINTS)

1. What is Economics?

Prepared by:

FLORENCE C. DE LEON
Teacher