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# GENERAL SANTOS HOPE CHRISTIAN SCHOOL Block 8, Dadiangas Heights, Gen.

Santos City

SECOND PERIODICAL EXAMINATION ECONOMICS FOURTH YEAR A and B SY: 2009 2010 NAME : ___________________________ ROGELIO B. PONTEJO I. SCORE: __________ DATED: __________

MULTIPLE CHOICE: Choose the correct answer. Write the letter of your choice in the space provided before each item.

________ 1. The term used to refer to mans important needs, such as food, water, shelter, and clothing. A. Goods B. cost C. service D. basic needs

________2. Graph that has a row similar lines indicating the whole quantity of one thing or population. A. broken line graph B. bar graph _______3. Variable in the vertical axis . A. Independent variable B. dependent variable C. pie graph D. line graph

## C. demand curve D. quantity demanded

_______4. A formal method of explaining the similarities and equalities of mathematical and logical terms. A. Axis B. slope C. scope D. equation

_______5. A kind of relationship where the dependent variable increases with the independent variable. A. directly proportional B. inversely proportional C. slope D. elasticity

______ 6. The following are important information about graphs, EXCEPT. A. axis B. coordinate C. relation D. equation

______7. If the price of Coke rises (because of a supply decrease), demand for Pepsi should increase as a manifestation of demand movement caused by. A. Income B. price of related goods C. taste D. number of buyers

______8. The following can cause an increase in demand, EXCEPT: A. B. C. D. Favourable change in consumer tastes. Increase in the number of buyers. Rising income if product is a normal good. Rising income if product is an inferior good

______9. The following can cause a decrease in demand, EXCEPT: A. B. C. D. Decrease in number of buyers Increase in price of complementary goods Unfavorable change in consumer taste Consumers expect higher prices or incomes in the future

## ______10. Which statement best explain the Law of Supply

A. There is a direct relationship between price and quantity supplied B. Producers will produce and sell more of their product at a high price
than at a low price C. Given product costs, a higher price means greater profits and thus an incentive to increase the quantity supplied. D. Beyond some production quantity producers usually encounter increasing costs per added unit of output. _____11. In which situation will demand decrease for small automobiles such as the Mini Cooper and Smart car? A. Small automobiles become more fashionable. B. The price of large automobiles rises (with the price of small autos remaining the same). C. Income declines and small autos are an inferior good. D. Consumers anticipate the price of small autos will greatly come down in the near future. ______12. In which situation will supply of automobile tires decrease A. A technological advance in the methods of producing tires. B. The expectation that the equilibrium price of auto tires will be lower in the future than it is currently. C. A decline in the price of large tires used for semi-trucks and earth hauling rigs (with no change in the price of auto tires). D. A decline in the number of firms in the tire industry _____ 13. We can say with certainty that when the demand for TVs increases in the long run, prices A. will go down. B. change proportionately C. settle at the original level. D. cannot be predicted without the knowledge of elasticity of demand. ______14. In the typical demand schedule, quantity demanded A. B. C. D. varies directly with price. varies indirectly with price. varies inversely with price. is independent of price.

_______15. By 'increase' in demand we mean A. B. C. D. movement upwards on a demand curve. movement downwards on a demand curve. movement upwards of a demand curve. none of these

_______16. To keep the price of gas from rising quickly after Katrina, the government instituted price ceilings on the price of gasoline in some states. These price ceilings caused _________ in the gasoline market. A. B. C. D. surplus movement of the demand curve movement along the demand curve shortages

_______17. The demand for a commodity is said to be elastic if the total amount spent on it is A. less when the price is low than when the price is high; B. more when the price is low than when the price is high; C. the same whether the price is high or low. D. none of these _______ 18. Elasticity is : A. B. C. D. the slope of demand curve; usually greater than unity; usually less than unity; and a ratio of relative changes between a dependent variable and an independent variable.

_______19. Demand for electricity is elastic because A. B. C. D. it has a number of close substitutes; it has alternative uses; the change in price is crucial to the change in demand a change in price has no effect on demand

______20. If demand is inelastic and price increases: A. B. C. D. total revenue will fall; total revenue will rise total revenue will be unchanged. None of these

______ 21. Before a consumer decides to buy something, he/she must go through the following processes; EXCEPT. A. B. C. D. Has to have a motivation and means to buy the product Has to see or test the product Has to know the product specifications Has to ask someone about the product

_____ 22. Identifying problems about the product, involves; A. Psychological Core B. Consumers Culture C. Decision Making D. Behavior Outcomes

_____ 23. Marvin likes the T-shirt he bought from KCC, he immediately wears it and tells his classmates where he bought the T-shirt, involves: A. Psychological Core B. Consumers Culture C. Decision Making D. Behavior Outcomes

______24. James mother usually buy food, toys, and recreational materials for her children, involves; A. Psychological Core B. Consumer Age C. Decision Making D. Consumers Culture

For items 25 35. Use your knowledge in elasticity and inelasticity of supply and demand in analyzing every item ______25. If the quantity supplied of a product increases at every price (shifting the supply curve rightward) and the demand curve for the product is relatively inelastic, equilibrium quantity will ____, equilibrium price will ____, but equilibrium ____ will change proportionately more. A. B. C. D. decrease; increase; price increase; increase; price increase; decrease; price increase; increase; quantity

______ 26. If the price of a product changes by 5 percent, and as a result quantity demanded changes by 10 percent, A. demand for the product is price-inelastic. B.. revenue will rise if the price change was an increase. C. revenue will fall if the price change was a reduction. D. revenue will rise if the price change was a reduction. ______ 27. If even the smallest reduction in the price of a product results in the quantity supplied falling to zero, the supply for this product A. B. C. D. is perfectly price-inelastic. is price-inelastic. is perfectly price-elastic. is price-elastic.

______ 28. If the price elasticity of supply for a product is 2, a price increase from \$1.00 to \$1.02 will cause quantity supplied to A. B. C. D. rise by 4 percent. rise by 2 percent. fall by 4 percent. fall by 2 percent.

______ 29. The formula for the price elasticity of supply is the A. percentage change in quantity supplied divided by the percentage change in price. B. change in quantity supplied divided by the change in price. C. percentage change in price divided by the percentage change in quantity supplied. D. change in price divided by the change in quantity supplied. ______ 30. A tax has been levied on a product. The more price-elastic the demand for that product is, A. the more likely it is that the tax is borne equally by consumers and sellers. B. the greater is the proportion of the tax borne by producers. C. the greater is the revenue that is raised by the tax. D. the greater is the proportion of the tax borne by consumers. _______ 31. If a firm lowers the price of its product and finds that total revenue has fallen, this indicates that A. B. C. D. demand for the product is price-inelastic. demand for the product is price-elastic. demand for the product has unit price elasticity. the price elasticity is greater than 1.

_______ 32. If the price elasticity of demand for a product is .5, a price ____ will result in ____ in revenue. A. B. C. D. reduction; an increase increase; a reduction increase; no change increase; an increase

_______33. If the supply curve of a product is relatively elastic and the price of a compliment to the product rises, equilibrium quantity will ____ and equilibrium price will ____, but equilibrium ____ will change proportionately more. A. decrease; decrease; price B. increase; decrease; price C. decrease; decrease; quantity D. increase; decrease; quantity ______ 34. If the supply of a product is upward sloping and the price of a substitute product rises, equilibrium quantity will ____ and equilibrium price will ____. A. increase; increase B. decrease; increase C. increase; decrease D. decrease; decrease

_____ 35. In a certain PBA game, 40,000 tickets were sold at P150.00 a piece. The game was sold out and some people did not get tickets even though those individuals were willing to pay at least P150.00. This suggests that the selling price: A. was at equilibrium B. was below equilibrium C. was above equilibrium D. could not have been any higher

II.

TRUE OR FALSE. Write TRUE if the statement is correct and FALSE if otherwise.

______ 36. Climate is the condition of the atmosphere in a given period. ______ 37. Consumer behavior determines the demand the product alone.

_______38. Advertisements give prospective consumers reason to buy a product. ______ 39. Brand loyalty is when consumers continue to buy a certain product because they believe that it is a good product. ______ 40. All advertisements about a particular product is true. ______ 41. The producers have no responsibility of protecting the consumers. ______ 42. Consumers should make complaints based on false pretense that could harm the store or companies. ______ 43. Marginal utility diminishes with increased consumption, becomes zero when total utility is at a maximum, and in negative when total utility declines ______44. Law of Diminishing Marginal Utility- states that as the consumer consumes successive units of a commodity, the marginal utility diminishes. ______45. Demand curve is always negatively sloping. III. MATCHING TYPE: Match the items in column A with the items in column B. Write the letter of your choice in the space provided before each item. A
______ 46. Cardinal ______ 47. Total Utility B. Latin word which means number ______48. Ordinal Utility ______ 49. Average Utility ______ 50. Marginal Utility ______ 51. Disposable income ______52. warranty ______53. Bait and switch ______54. Comparison shopping G. ______55. Competitive advertising Deceptive advertising intended to defraud the consumers E. Additional satisfaction that a person achieves from the additional amount consumed from a product F. Theory that states that utility of a product cannot be measured C. Measures the mean of satisfaction from each use of a product D. Shows if the total utility of a product increases, its marginal utility decreases

B
A. Cumulative desires of a person buying a product or service

H. Getting information about similar types of products and price. I. Money income left after taxes have been paid.

J. Attempts to persuade consumers that certain products are superior to others. K. Written guarantee of a product for a certain period of time.

IV.

PROBLEM SOLVING:

56 60. Consider the following market supply and demand schedule Price 10 20 30 40 Quantity Demanded 100 75 50 25 Quantity Supplied 20 50 80 110

A. Draw the supply and demand curves with the y axis labeled price and x-axis labeled quantity

B. What is the equilibrium price?: ____________________________ C. How many units will be sold at the equilibrium price?: __________ V. DISCUSSION:

GOD BLESS