Applied Economics Reviewer

1. Which of the following will result to an Increase in equilibrium and a decrease in equilibrium
quantity?
a. When both demand and supply decrease but the decrease in demand exceeds the decrease
in supply
b. When supply decreases and demand increases, and the decrease in supply exceeds the
increase in demand
c. If both demand and supply decrease
d. If both demand and supply increase

2. What will happen when there is an increase in the supply?

a. A decrease in equilibrium price and an increase in equilibrium quantity
b. A decrease in both equilibrium price and equilibrium quantity
c. An increase in both equilibrium price and equilibrium quantity
d. An increase in equilibrium price and a decrease in equilibrium quantity

3. How does RA 11310 or the Pantawid Pamilyang Pilipino Program (4ps) address the problem of
economic development in the Philippines?
a. Supplements household income of the indigent families to improve their quality of life
b. Provides stable financial support for the poorest of the poor to increase household spending
c. Reduces poverty incidence
d. Promotes families to buy more basic needs and allows children to continue with their
education

4. Determine which economic principle is being described in each statement. Answer PE for
Positive Economics and NE for Normative Economics.
The Philippine Economy recession of 2020 was caused by the extended lockdowns, steep decline
in household spending, business shutdowns, and economic uncertainties. – PE

5. Poverty has affected many aspects of Filipino Society. Families can’t even provide food to their
children before sending them to school. Which of the following choices is the best solution?
a. The DepEd should provide scholarships with allowance to the poorest of the poor
b. The DSWD will identify the indigents in the community and provide them with food packs
c. LGU’s should have a feeding program in public schools
d. The Department of Agriculture will support families through the community/ backyard
vegetable farming.
6. Given the supply function (P = 0.4Q) and demand function (P = 40 – 0.4Q). Compute for the
equilibrium quantity.
a. 50
b. 70
c. 80
d. 60

7. How does the role of the Bangko Sentral ng Pilipinas affect the economic development of the
Philippines?
a. Promotes financial stability by coordinating monetary policies with government legislation
b. Controls inflation by regulating financial institutions
c. Coordinates with other government agencies in crafting fiscal policies
d. Affects household spending by influencing short –term market interest rates

8. Dom Perignon is a limited -edition champagne. What would this most likely result to?
a. A surplus and prices are expected to increase
b. A shortage and prices are expected to decrease
c. A surplus and prices are expected to decrease
d. A shortage and prices are expected to increase

9. We measure the value of the economy in terms of resources input and individual output. What
is considered as the heart of the economy?
a. Resources
b. Production
c. Individuals or Households
d. Government

10. Use the graph below as reference to answer this question.

a. Shortage of 400
b. Shortage of 200
c. Surplus of 200
d. Surplus of 400

When equilibrium price is at 40, what will this result to?

11. What method of measuring the economy adds all the resources and contributions during the
production process?
a. GNP Income Approach
b. GDP Expenditure Approach
c. GNP Expenditure Approach
d. GDP Income Approach

12. Which of the following will result to an increase in both equilibrium price and quantity?
a. When both demand and supply increase but the increase in demand is more than the
increase in supply
b. When both demand and supply increase but the increase in supply is more than the
increase in demand
c. When both demand and supply decrease but the decrease in demand is more than the
decrease in supply
d. When both demand and supply decrease but the decrease in supply is more than the
decrease in demand

13. Using the Demand and Supply Schedules, determine the equilibrium quantity.

a. 250
b. 200
c. 175
d. 300

14. Pfizer Inc., one of the makers of the COVID-19 vaccine, found that orders from countries far
exceeds their production capacity. What would most likely happen?
a. There is a shortage and price is expected to increase
b. There is a shortage and price is expected to decrease
c. There is a surplus and price is expected to increase
d. There is a surplus and price is expected to decrease

15. Determine which economic principle is being described in each statement. Answer PE for
Positive Economics and NE for Normative Economics.
The passing of the CREATE bill into law would encourage SME’S to operate and alleviate the
worsening unemployment rate in the Philippines. - NE
16. Use the graph below as reference to answer this question.
a. Shortage of 40
b. Shortage of 75
c. Surplus of 75
d. Surplus of 40

17. Which theory in economic development states that underdevelopment of economies is caused
by poor economic policies, mismanaged resources, and government corruption?
a. Neoclassical Theory
b. Linear Stage of Growth
c. International Dependence
d. O-ring Theory

18. What studies how society and its members produce, distribute, and consume goods and
services?
a. Economics as a social science
b. Macroeconomics
c. Economics as an applied science
d. Economics

19. In 2018, the Japan International Cooperation Agency found out that the traffic condition in
Metro Manila cost Ᵽ3.5 Billion of lost opportunities each day. What is the best solution to this
problem?
a. Implement an extended time for truck bans and only allow public and private on
road from 6am to 9pm.
b. Upgrade traffic lights system and assign more traffic enforcers to monitor road
traffic conditions.
c. Improve public transportation system and allow more transport routes for buses
and jeepneys.
d. Discourage individuals to own private cars and increase government budget for
public transportation and infrastructure.

20. There are approximately 1.5 million informal settlers nationwide with majority located in Metro
Areas. This is expected to increase because of the population boom and the increasing rate of
urbanization. What best course of action should be taken?
a. Entice urban informal settlers to return to their home province with Balik to Probinsya
Program and cash assistance.
 b. Require the owners / developers of subdivisions and condominiums to develop socialized
housing within the city/ municipality of their project.
c. Demolish the houses resided by informal settlers, convert it to an industrial area, and hire
the informal settlers as priority workers in the new factories.
d. Relocate urban informal settlers to places outside the Metro Areas through affordable
socialized housing.

21. Determine which economic principle is being described in each statement. Answer PE for
Positive Economics and NE for Normative Economics.

The COVID -19 vaccine roll-out is expected to bring optimism to the stock market. - PE

22. Use the graph below as reference to answer this question.

a. Surplus of 500
b. Shortage of 500
c. Shortage of 200
d. Surplus of 200

23. How does RA 10354 or the Responsible Parenthood and Reproductive Health Act of 2012
address the problem of economic development in the Philippines?
a. All mothers nationwide will be provided with the access to free reproductive health services.
b. Educates parents about birth control methods, both natural and artificial
c. Public information dissemination of all reproductive health care services and its free access
in barangay health care centers
d. Controls the population growth with the availability of reproductive health care services

24. Due to economic recession, the Philippines is currently experiencing cyclical unemployment.
What is the best action should the government take to solve this economic problem?
a. Open Job Fairs in different regions all throughout the country.
b. Provide cash grants to those affected and are unemployed.
c. Decrease the business tax and offer low-interest loans to affected businesses.
d. The government should hire casual employees for COVID-19 tracing and distribution of the
vaccine.
25. Using the Demand and Supply Schedules, determine the equilibrium price.
a. 100
b. 150
c. 90
d. 130

26. Use the graph below as reference to answer this question.

a. 12
b. 8
c. 5
d. 10

What is the equilibrium price?

27. What will happen when there is an increase in demand?

a. A decrease in both equilibrium price and equilibrium quantity
b. An increase in both equilibrium price and equilibrium quantity
c. A decrease in equilibrium price and an increase in equilibrium quantity
d. An increase in equilibrium price and a decrease in equilibrium quantity

28. What does this graph represent?

a. Shift in demand curve
b. Shortage
c. Market equilibrium
d. Surplus
29. During the peak of the harvest season, more vegetable varieties are available. What would this
most likely result to?
a. A surplus and prices are expected to increase
b. A shortage and prices are expected to decrease
c. A shortage and prices are expected to increase
d. A surplus and prices are expected to decrease

30. What will happen when the increase in supply exceeds the increase in demand?
a. Both the equilibrium price and equilibrium quantity will increase.
b. Both the equilibrium price and equilibrium quantity levels will decrease.
c. The equilibrium price will increase while the equilibrium quantity will decrease.
d. The equilibrium price will decrease while the equilibrium quantity will increase.

31. Which characteristic of development is defined by the availability and variety of choices?
a. Self-esteem
b. Sustenance
c. Pride
d. Freedom

32. Given the supply function (P = 0.4Q) and demand function (P = 40 – 0.4Q). Compute for the
equilibrium price.
a. 15
b. 25
c. 30
d. 20

33. How does RA 10351 or the Sin Tax Reform Law solve the issues of economic development in the
Philippines?
a. Discourages individuals from buying alcoholic and tobacco products
b. Simplifies the excise tax system on alcoholic and tobacco products
c. Helps finance the Universal Health Program while addressing public health issues relating
to alcohol and tobacco consumption
d. Increases government revenues which increases the GDP
34. Use the graph below as reference to answer this question.
a. Shortage of 450
b. Surplus of 50
c. Shortage of 50
d. Surplus of 450

35. When equilibrium price is at 25, what will this result to?
a. Surplus of 200
b. Shortage of 200
c. Surplus of 500
d. Shortage of 500

36. How does the K to 12 Basic Education Curriculum, RA 10533, help the Philippines in addressing
its problems in economic development?
a. Improves the educational system of the Philippines to be at par with neighboring
countries
b. Provide more government funding for the educational system
c. Prepares students for college
d. Ensures students with more opportunities after graduating from basic education

37. Determine which economic principle is being described in each statement. Answer PE for
Positive Economics and NE for Normative Economics.

The ASF has affected the supply of pork and caused the prices of pork products to increase. – PE

38. The supply of rice has always has been a problem in the Philippines. This causes the prices of
rice to be very violate. Which course of action should best be taken by the government?
a. Implement Balik Probinsya in Metro Areas and give them funds to start farming in their
provinces.
b. The government should have a permanent contact with Cambodia to regularly supply the
Philippines with affordable rice.
c. The NFA should always maintain a 6-month buffer stock.
d. Allow anyone to import rice, tax those imported rice, and use the collected tax to support
local rice farmers.
39. Because of the equipment upgrade, Moshi Manju is producing more than the customers’ orders.
What would most likely happen?
a. There is a shortage and prices are expected to decrease
b. There is a shortage and prices are expected to increase
c. There is a surplus and prices are expected to increase
d. There is a surplus and prices are expected to decrease

40. Determine which economic principle is being described in each statement. Answer PE for
Positive Economics and NE for Normative Economics.

To control the prices of pork ad pork-related products in the market, the Department of
Agriculture should implement price controls and augment pork supplies. - NE