1.

The idea of _____________ in economics is that we have unlimited wants but limited
resources.
(1/1 Point)
a. opportunity costs
b. substitution effect
c. scarcity
d. normative economics
Answer: C

2.In a free enterprise economy, the basic economic problems are solved by:
(1/1 Point)
a. the price mechanism
b. a planning committee
c. peoples’ representatives
d. none in the given options
Answer: A

3.Which is an example of external economies of scale?

(1/1 Point)
a. managerial specialization
b. favorable management policies
c. transportation and communication facilities
d. none in the given options
Answer: C

4.The economic problem that refers to the nature of goods and services the economy
should produce:
(1/1 Point)
a. What to produce
b. How to produce
c. How much to produce
d. For whom to produce
Answer: A

5.Motivation, perception and beliefs fall under the category of what factor of consumption?
(1/1 Point)
a. Personal
b. Social
c. Psychological
d. none in the given options
Answer: C

6.Which among the following is NOT considered a capital or capital good?

(1/1 Point)
a. computer unit
b. money
c. building
d. sewing machine
Answer: B

7.The Law of Diminishing Returns is due to:

(1/1 Point)
a. increasing resources
b. changing resource efficiency
c. resource limitations
d. changing resource mix
Answer: C

8.That branch of economics which deals with the economic behavior of aggregative units
in the economy such as government, business and household:
(0/1 Point)
a. Political economics
b. Positive economics
c. Macroeconomics
d. Microeconomics
Answer: C

9.The equi-marginal principle in consumption explains that a consumer will not be able to
maximize his satisfaction until he has made the marginal utility per peso spent on all
his purchases _________.
(1/1 Point)
a. equal
b. higher
c. lower
d. none in the given options
Answer: A

10._______ emphasizes the role of power in economic decision making with the belief that
the many economic problems affect public policy:
(1/1 Point)
a. Normative Economics
b. Political Economy
c. Positive Economics
d. Economic Analysis
Answer: B

11.The price system is most effective under:

(1/1 Point)
a. Command economy
b. Market economy
c. Socialist economy
d. Traditional economy
Answer: B

12.Which one of the following would cause the production possibilities curve (PPC) to shift
to the left?
(1/1 Point)
a. a technological advancement
b. an increase in the skill level of workers
c. a deterioration in the interstate highway system
d. a discovery of more oil
Answer: C

13.Opportunity cost refers to:

(1/1 Point)
a. something that one may forego when choosing an alternative
b. the amount spent when choosing an alternative
c. the benefit one gets from choosing a certain alternative
d. all of the given options
Answer: A

14.Which is true of sole proprietorship?

(1/1 Point)
a. has unlimited life
b. has unlimited liability
c. subject to many government regulations
d. provides limited liability for its owners
Answer:

15.Which is the most appropriate tool to use in determining the validity of economic
hypothesis?
(1/1 Point)
a. Graphical
b. Mathematical
c. Statistical
d. Economic Policy
Answer: C

16.The following are examples of internal economies of scale except:

(0/1 Point)
a. human resource development
b. division of labor
c. government policies
d. none in the given options
Answer: C

17.A knowledge and understanding of years of colonial rules in the Philippines may help
explain present issues and problems in the Philippine economy which clearly
indicates the relation of Economics to:
(1/1 Point)
a. History
b. Sociology
c. Religion
d. Political Science
Answer: A

18.A planning committee determines what to produce in a:

(0/1 Point)
a. market economy
b. command economy
c. mixed economy
d. none in the given options
Answer: B

19.One characteristic of the Philippine economic system is the practice of:

(1/1 Point)
a. deregulated commodity pricing
b. central planning authority
c. absolute free enterprise
d. guided free enterprise
Answer: D

20.The government should hasten the distribution of relief goods and other assistance to
the people in Mindanao whose place was heavily damaged by earthquake. This
statement pertains to:
(1/1 Point)
a. Microeconomics
b. Macroeconomics
c. Normative Economics
d. Positive Economics
Answer: C

21.The Law of Economic Scarcity includes all EXCEPT one of the following:
(1/1 Point)
a. the rate of population
b. the supply of goods in abundant quantity
c. scarce economic goods
d. none in the given options
Answer: B

22.This is one basic economic task concerned with the choice of production technique.
(1/1 Point)
a. What to produce
b. How to produce
c. How much to produce
d. For whom to produce
Answer: C

23.A fundamental question in Economics which involves decisions on how to distribute the
supply of goods among society’s members:
(1/1 Point)
a. What to produce
b. How to produce
c. How much to produce
d. For whom to produce
Answer: D

24.This is a form of non-price competition resorted to by competitors in an economy

governed by the price system:
(1/1 Point)
a. free competition
b. advertisement
c. discounts
d. promo
Answer: B

25.Which does NOT describe a Market Economy?

(1/1 Point)
a. Freedom of choice
b. Competition is a prime mover
c. Ownership and management by the state of capital resources
d. none in the given options
Answer: C

26.In the circular flow of goods and income, which have the effect of decreasing the level
of economic activity?
(0/1 Point)
a. Government spending
b. Exports
c. Investments
d. Taxes
Answer: B

27.It refers to the ability to organize resources in the production of goods or provision of
services:
(0/1 Point)
a. production
b. consumption
c. exchange
d. entrepreneurship
Answer: D

28.Gathering of facts is sometimes called _______ as it is based on observable or

verifiable behavior.
(1/1 Point)
a. Descriptive Economics
b. Normative Economics
c. Political Economy
d. Positive Economics
Answer: A

29.Which one of the following would NOT be considered a macroeconomic issue?

(1/1 Point)
a. inflation
b. economic growth
c. national unemployment
d. consumer behavior
Answer: D
30.Which refers to the additional cost incurred when additional units of products are
produced?
(1/1 Point)
a. fixed cost
b. marginal cost
c. total cost
d. variable cost
Answer: B

31.Along a society's production possibilities frontier, _____________

(1/1 Point)
a. available resources are being used efficiently.
b. more of one good can be produced without giving up some of the other good
c. resources are not being fully utilized
d. the level of technology is changing
Answer: A

32.It is the sum of fixed and variable costs at each level of output:
(1/1 Point)
a. marginal cost
b. total cost
c. opportunity cost
d. none in the given options
Answer: B

33.This is a form of business organization recognized by law as a separate legal entity

having all the rights of an individual.
(1/1 Point)
a. Sole proprietorship
b. Partnership
c. Corporation
d. Cooperative
Answer:C
34.The principle of Diminishing Marginal Productivity states that: If increasing amounts of
variable factors are applied to fixed amounts of other factors, the marginal product of
the variable factor ________.
(0/1 Point)
a. increases beyond a certain number
b. decreases beyond a certain number
c. remains constant
d. none in the given options
Answer: A

35.Which one of the following would NOT be considered a factor of production?

(1/1 Point)
a. A financial analyst
b. A new house
c. A computer
d. none in the given options
Answer: B

36.Some couples’ refusal to adopt the use of artificial contraceptives as a way of curtailing
the rapid increase in population clearly indicates the relation of Economics to:
(0/1 Point)
a. History
b. Sociology
c. Religion
d. Political Science
Answer: C

37.The term often used by economists to qualify the validity of economic laws/principles-
which means “other things being equal”:
(1/1 Point)
a. ceteris paribus
b. laissez-faire
c. invisible hand
d. central planning
Answer: A
38.In the circular flow of economic activity, what is being supplied by the business firm to
the household in exchange for payments representing consumption expenditure?
(1/1 Point)
a. Goods and services
b. Economic resources
c. Raw materials
d. Profits
Answer: A

39.In the circular flow of economic activity, the goods, resources and money payments will
flow as long as:
(1/1 Point)
a. households continue to consume
b. firms continue to produce
c. businesses earn profits
d. A and B
Answer: D

40.This refers to a specific volume of sales at which a firm neither makes nor losses
money.
(1/1 Point)
a. break-even point
b. budget line
c. indifference curve
d. income effect
Answer: A

41.It means “let alone” which connotes government non-interference with private
enterprise or business.
(1/1 Point)
a. ceteris paribus
b. laissez-faire
c. invisible hand
d. central planning
Answer: B
42.Which among the following is a type of cost which changes in proportion to volume of
production?
(1/1 Point)
a. variable cost
b. fixed cost
c. opportunity cost
d. none in the given options
Answer:A

43.Under this system, the government owns and operates the basic industries like
telecommunications, water service, transport, banking etc. while leaving the minor
ones to private individuals:
(0/1 Point)
a. Command economy
b. Market economy
c. Socialist economy
d. all of the given options
Answer: C

44.Which of the following statements is positive economics?

(1/1 Point)
a. The government should implement wage hike to lessen the brain drain phenomenon
b. Last year, 20% of the national budget was allocated to social services
c. Government fund earmarked for poverty alleviation program need to be increased
d. Funds allocated for debt service should be reduced so as to improve the provision for
better services to the people
Answer: B

45.Economics recognizes the importance of model building which has the purpose of
_______.
(1/1 Point)
a. solving all economic problems that may arise
b. offering solutions to existing problems
c. making predictions about the real world
d. analyzing the cause and effect relationships of various economic data
Answer: C
46.In the circular flow of goods and income, which have the effect of increasing the level of
economic activity?
(1/1 Point)
a. Taxes
b. Imports
c. Savings
d. Investments
Answer: D

47.Which is NOT true regarding the principle of substitution effect?

(1/1 Point)
a. The principle of substitution effect holds true to any types of products as in between
bread and butter.
b. A reduction in the price of a commodity would induce the consumer to substitute the
high-price commodity for another related commodity.
c. The substitution effect measures how much the higher price encourages consumers to
use other goods assuming the same level of income.
d. The substitution effect shows an increased demand for one commodity as a result of a
decreased demand for the other due to an increased in its price.
Answer: A

48.Economics is best defined as the study of:

(1/1 Point)
a. how to operate a business
b. how society manages its unlimited resources
c. the best way of eliminating scarcity
d. how individuals make choices to cope with scarcity
Answer: D

49.The Law of Diminishing Marginal Utility maintains that as more of a commodity is

consumed by an individual, he/she gains ________ additional satisfaction from
consuming another unit.
(1/1 Point)
a. more
b. very high
c. less
d. all of the given options
Answer: C

50.Which among the following characterizes a centrally planned market system?

Immersive Reader
(1/1 Point)
a. prices effectively allocate resources
b. private ownership of resources ensures that they are distributed equally
c. firms have the unlimited choice on what and how much they produce
d. government decides the best allocation of resources
Answer: D