Republic of the Philippines

Department of Education
Caraga Administrative Region
Division of Agusan del Sur
Sibagat District II
AFGA NATIONAL HIGH SCHOOL

SUMMATIVE TEST
APPLIED ECONOMICS

Name: _______________________ Grade/Section: ___________ Date: __________

TEST I. MULTIPLE CHOICE: Read and analyze each item carefully. Write the letter corresponding the best
answer on your answer sheet.
1. There is scarcity of resources because:
A. Man’s wants are unlimited C. Man’s wants are enough
B. Man’s wants are limited D. Man’s wants are satisfied
2. An economic resource that includes the natural resources:
A. Land C. Capital
B. Labor D. Entrepreneur
3. Economics is a social science because it deals with:
A. Human nature C. Experimentation
B. Natural resources D. Plants and animals
4. The market equilibrium for a commodity is determined by:
A. The market demand of the commodity
B. The market supply of the commodity
C. The balancing forces of the demand and supply of the commodity D. Any of these
5. Another term used for “equilibrium” is:
A. Deflation C. Growth
B. Static D. None of the above
6. Demand for smart phone increases despite the increase in price, is due to a change in:
A. Supply C. Demand
B. Quantity demanded D. None of the above
7. Single firms that sell in the market and have no close substitutes.
A. Perfect competition C. Monopolistic competition
B. Monopoly D. Oligopoly
8. Macroeconomics deals with the following except:
A. Gross National Product C. National Income
B. Employment D. Price of rice
9. Economics is important so that we may be able to:
A. Understand problems facing the citizens and family
B. Help the government promote growth and improve quality of life
C. Analyze fascinating patterns of social behavior
D. All the above
10. Income received by an entrepreneur:
A. Salary C. Interest
B. Rent D. Profit
11. Production decisions are made according to customs and traditions:
A. Traditional system C. Market system
B. Command system D. Mixed system
12. Man’s mental and physical efforts exerted in production:
A. Land C. Entrepreneur
B. Labor D. Capital
13. Payment made to labor:
A. Wage C. Profits
B. Rent D. Interest
14. An economy where individuals exercise free enterprise:
A. Traditional system C. Market system
B. Command system D. Mixed system
15. The economic problem that refers to the nature of goods and services the economy should produce:
A. What to produce C. How much to produce
B. How to produce D. For whom to produce
16. In a market economy, the basic economic problems are solved by:
A. The price mechanism
B. The elected representative of the people
C. A planning committee
D. The ancestors
17. Which of the following is not classifiable as a natural resource?
A. Land C. Minerals
B. Capital D. Forests
18. The dictator or a planning committee determines what to produce in a:
A. Market C. Command economy
B. Traditional economy D. Mixed economy
19. The following statements are correct except:
A. Authority to tax is inherent to every state
B. Taxes are compulsory contributions to support the state
C. Overseas workers cannot be taxed for his income earned in abroad
D. Taxation regulates the flow of income in an economic system
20. A market structure that implies an ideal situation for the buyers and sellers.
A. Perfect competition C. Monopolistic competition
B. Monopoly D. Oligopoly

Test II. TRUE or FALSE: Write TRUE in the space provided if the statement is correct and FALSE if
incorrect.
_____________ 1. A market is a mechanism of interaction between buyers and sellers for trade
or exchange. The consumer sells and the seller buys.
_____________ 2. The demand for a product is the quantity of a good that the buyers are
willing to buy at certain prices. A demand schedule shows the different
quantities that will be sold by the sellers given various prices.
_____________ 3. A demand function shows how the quantity demanded of a good is
dependent on its determinants, the most important of which is the price of
the goods itself.
_____________ 4. One of the non-price determinants of demand is taste. Taste or preference
may vary from person to person.
_____________ 5. The consumers’ income does not influence the demand for goods and
services. The increase in demand due to an increase in income is not
experienced in the economy.
______________ 6. An increase in population results in a greater demand since there will be
more consumers as population increases.
______________ 7. The supply of a product is the quantity of goods that sellers are willing to
sell. The supply schedule shows the different quantities that will be sold.
______________ 8. The demand curve is upward sloping to the right while the supply curve is
downward sloping.
______________ 9. When the income of the consumer increases it can shift the demand curve
upward to the right representing increase in demand.
______________10. Expectations as to future incomes and price may cause a shift of the demand
curve.
 Test III. Computation: Based on the following functions for demand and supply, compute the
demand and supply schedules:
A. QD = 500 - 20P QS = 50 + 10P

Price Quantity Demanded Quantity Supplied

P 5.00
P 10.00
P 15.00
P 20.00
P 25.00

B. Plot the above schedules on a single graph. Identify the equilibrium price and
equilibrium quantity.

C. Solve for Equilibrium PE and QE

1. QD = 2982 - 677P
QS = 659 + 3215P

2. QD = 169,712 - 22,893P
QS = 20,395P

- GOD BLESS -