A. Classify the given resources below as land, labor, capital or entrepreneurship.

___________1. Entertainers ___________4. Marine Resources

____________2. Technology ___________5. Teacher

____________3. Business Proprietor

B. Describe the type of economic system (Market Economic System, Command Economic System or Mixed
Economic System) characterized in each of the following statements:

___________1. Prices are based on demand and supply.

___________2. The government decides on what goods should be produced.

___________3. People enjoy freedom of choice in arriving at decisions on what to buy.

___________4. It is the most democratic form of economic system.

___________5. People’s preferences are reflected in the prices they are willing to pay in the market.

C. Write True if the statement is correct, otherwise write False.

___________1. The principle of rationality believes that the behavior of an individual is often difficult to predict since
they are illogical and inconsistent.

___________2. Assumptions refer to errors in judgement or conclusions due to faulty reasoning.

___________3. Economics as applied science helps us to understand and predict the outcomes of current economic
situations.

___________4. Economics as an applied science is an effective tool to show us the real situations to come up with
sound decisions.

___________5. Applied science is the study of how people behave and influence their society.

D. Classify whether the given statement below describes economics as social science or applied science. Write the
letter of your choice beside the number of each given statement.

A. Economics as Social Science

B. Economics as Applied Science

___________1. It uses models to visualize information and analyze variables and their relationships.

___________2. It uses scientific methods to build theories to help explain the behavior of individuals, groups and
organizations.

___________3. It studies how individuals make choices in allocating scarce resources to satisfy their unlimited
wants.

___________4. It is characterized as the application of economic theory and econometrics.

___________5. It is a powerful tool to reveal the real and exact situation to come up with things to do.

___________6. It formulates theories through testing and analyzing historical data.

___________7. It is concerned with the production, distribution and consumption of goods and services.

___________8. It studies how societies solve the fundamental problem of reconciling the unlimited wants of
individuals with limited resources.

___________9. It utilizes economic theories and models for forecasting future trends.

___________10. It teaches valuable lessons to avoid recurrence and minimize the impact of a negative situation.