PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)

PLM BUSINESS SCHOOL
DEPARTMENT OF BUSINESS ECONOMICS

FINAL EXAMINATIONS
MICRO AND MACRO ECONOMICS | ECON 119-1

Name: Leanzy Jenel Osunero Date: June 21, 2022

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
1.  Scarcity is defined as the condition in which A
a. both wants and resources are limited.
PAMANTASAN NG LUNGSOD NG MAYNILA
b. wants are finite and resources infinite. of the City of Manila)
(University
PLM BUSINESS SCHOOL
c. both wants and resources are infinite.OF BUSINESS ECONOMICS
DEPARTMENT
d. wants are infinite and resources finite.
 
2.  It takes one hour to fly between Las Vegas and Los Angeles, and the price of an airline ticket
is $60. It takes five hours to drive between Las Vegas and Los Angeles, and the price of a bus
ticket is $20. Under what condition would it be cheaper (in terms of lower opportunity costs) to
fly than to take the bus? B
a. under no conditions
b. under the condition that one values his or her time at $15 per hour
c. under the condition that one values his or her time at $6 per hour
d. under the condition that one values his or her time at $5 per hour
e. There is not enough information to answer the question.
 
3.  Which of the following statements is true? D
a. Evidence can never prove a theory.
b. Evidence cannot reject a theory.
c. Economists prefer not to test theories.
d. If the evidence supports a theory, the theory has been proved correct.
 
4.  The PPF is bowed outward as a result of B
a. constant costs.
b. increasing costs.
c. decreasing costs.
d. scarcity.
e. choice.
 
 
Exhibit 2-3

 
5.  Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, society may move
to PPF2 as a result of A
a. an increase in resources.
b. a decrease in resources.
c. an increase in productivity.
d. both a and c
e. both b and c
 
6.  Capitalist thinkers believe that prices B
a. are necessary to ensure that resources are allocated to their best use.
b. provide no incentives to consumers if set above their maximum buying
price.
c. are not necessary for resource allocation, but are one of several possible
allocation devices.
d. provide information only to buyers, but not to sellers.
 
7.  Where in the Cirular Flow of Economic Activity does the capitalistic economic system answer
the question of "to whom is output to be distributed?"
a. Households
b. Final Goods and Services Market
c. Business Firms
d. Factor Market