1. Economics is based on two fundamental facts. These c.

Scarcity
are d. All of the above
a. Resources are scarce while human wants are 9. Anything that can be offered to a market for
unlimited attention, acquisition, use or consumption to satisfy
b. Resources are scarce human needs and wants
c. Consumers would like to maximize their a. Products
satisfaction while producers would like to b. Goods
maximize profit c. Service
d. Family income is limited while goods and d. Technology
services to buy are limited 10. This is the utility created when raw materials are
2. This marketing function addresses the problem on transformed into products
product seasonality. The primary aim is to help balance a. Time
consumption or periods of scarcity b. Place
a. Processing c. Form
b. Storage d. Possession
c. Packaging 11. The process of transformation of inputs into output
d. Pooling a. Manufacturing
3. It is the key link in the food systems marketing chain b. Consumption
connecting different production points and consuming c. Processing
centers d. Production
a. Processing 12. System of compulsory contributions levied by a
b. Transportation government on persons, corporations and property,
c. Storage primarily as a source of revenue for government
d. Buying and selling expenses
4. It is the ratio between a country's export and imports a. Conscription
a. Net export b. Taxation
b. Balance of trade c. Philantrophy
c. Balance of payment d. Subsidy
d. None of the above 13. The astronomer who encountered the quantity
theory of money and prices
5. The objective or goal of a rational producer or firm is a. John Locke
a. Cost maximization b. Copernicus
b. Sales maximization c. John Law
c. Benefit maximization d. David Hume
d. Profit maximization 14. Tariff barrier
a. Quota
6. The book which became the apostle off classical b. Export tax
economics written by Adam Smith c. Import tax
a. Essay on the Principle of Population d. Preferential trading
b. Principles of Political Economy 15. The agreement among countries to present
c. Inquiry into the Nature and Causes of the common trade regulations and trading front
Wealth of Nations a. Uniform market
d. General Theory of Employment, Interest and b. Merging
Money c. Common market
7. It is a policy which defends domestic producers from d. Collusion
foreign competition 16. Known as the Father of Modern Economics
a. Fiscalism a. Adam Smith
b. Monetarist b. St. Thomas Aquinas
c. Mercantilism c. Karl Marx
d. Protectionist d. John Maynard Keynes
8. The fundamental problem faced by every economy 17. A system of buyers and sellers with facilities for
a. Finite amount of factors of production trading with each other
b. Limited supply of resources a. Supermarket
 b. Pure competitive market d. The Wealth of Nations
c. Public market 25. Which of the following is most closely approximates
d. Market our definitions of oligopoly?
18. It consists of market participants or intermediaries a. The fast food chains
who are directly responsible for making farmers' b. Corn farming in the region
product available to the users at the right place, time c. Rice farming in the region
and form d. The cigarette industry
a. Functional subsystem 26. To which of the following would the mercantilists
b. Flow subsystem have objected?
c. Channel subsystem a. Stimulating exports
d. Producer subsystem b. Accumulation of gold by their nation
19. These are considered as fixed costs except c. Restricting imports
a. Interest d. Free trade
b. Depreciation 27. The process of finding the future value in some
c. Tax future year of a present amount growing at compound
d. Labor cost interest
20. The economic system under which private a. Compound rate
individuals and businesses carry on the production and b. Discount rate
exchange of goods and services through a network of c. Compounding
markets d. Discounting
a. Mercantilism 28. An applied science which is concerned with the
b. Syndicalism identification, description and classification of economic
c. Socialism problems in agriculture
d. Capitalism a. Applied economics
21. A left-alone policy with respect to the business as a b. Normative economics
natural consequence of the principle of competition c. Positive economics
which is the underlying assumption of the invisible d. Agricultural economics
hands Who published the book "General Theory of
a. Freedom Employment, Interest and Money"?
b. Economics a. Leon Walras
c. Laissez Faire b. John Maynard Keynes
d. Cost c. Adam Smith
22. It is concerned with controlling or influencing d. David Ricardo
economic behavior or its consequences 30. While macroeconomics deals with the economy as a
a. Agricultural economics whole, microeconomics deals with the actions of
b. Positive economics individual
c. Normative economics a. enterprises
d. Policy economics b. employment
23. The inflation rate shows c. Expenditures
a. A measure of the change in real output from d. firms and markets
one year to the next 31. The CPI is designed to measure the degree to which
b. The price level in a given year expressed in a. income are distributed among the poor and rich
terms of a base year over time
c. The percentage rate per period that prices are b. consumer prices have risen relative to wages
increasing c. the cost of purchasing a bundle of consumer
d. The average price level during a particular goods has changed with time
period of time d. consumption patterns have changed with time
24. The first book ever published about the study of because of prices
economics 32. Laissez faire means
a. The General Theory of Employment, Interest a. absence of government support
and Money b. absence of government concern in the market
b. Das Kapital c. All of the above
c. Communist Manifesto d. absence of government intervention
33. The performance of all business activities involved in b. Functional approach
the flow of goods and services from initial agricultural c. Institutional approach
production until they are in the hands of the ultimate d. Structure-conduct-performance-approach
consumers 42. The export of a commodity at below costs or its sale
a. Marketing abroad at a lower price than at home
b. Marketing function a. Economic union
c. Marketing b. Import quota
d. Exchange function c. Dumping
34. A tariff expressed as a fixed percentage of the value d. Free trade area
of imported product 43. The anticipated reduction in the value of assets over
a. Special tariff time that is brought about through physical use or
b. Ad valorem tariff obsolescence
c. Nominal tariff a. Stagnation
d. Optical tariff b. Depreciation
35. A payment made by a borrower to lender c. Appreciation
a. Debt d. Devaluation
b. Debt service 44. In economics, this word is defined as the creation of
c. Interest goods and services to satisfy human wants
d. Principal a. Production
36. These are considered scarce and to be paid for and b. Consumption
are produced and needed by men to satisfy their wants c. Marketing
a. Intangible goods d. Transporting
b. Economic goods 45. Economics may be best defined as the study of
c. Tangible goods a. Why resources are scarce as they are
d. Market goods b. How to allocate the family income
37. It is an economic system associated more with the c. How to maximize profit
political system of a strong one-man or junta d. How resources are used to produce goods and
dictatorship services to be allocated among individuals in
a. Fascism the society
b. Socialism 46. Economics differs from other social sciences
c. Marxist because of its focus on
d. Feudalism a. Social interactions
38. Scarcity is a permanent economic phenomenon, b. Social behavior
shortage is c. Social choices
a. occasional d. Scarcity
b. short run 47. The term "ceteris paribus" means
c. temporary a. Scarcity or limited
d. limited b. Other things held constant
39. People who do not have jobs as a result of sluggish c. Absence of government intervention
economic activity are considered as part of d. Closed economy
a. The underemployed workforce 48. Theories in science
b. Structural unemployment a. are never based on hunches
c. Cyclical unemployment b. are simplified relations describing reality
d. Frictional unemployment c. are unconditional predictions about the future
40. The addition of values to a product as it moves to d. once established, apply forever
the consumer is called 49. Which of the following is the most basic of the
a. Production subjects with which the study of economics must seek
b. Selling to deal?
c. Marketing a. Profit seeking
d. Distribution b. Money
41. Study of the various agencies and business structure c. Scarcity
which perform the marketing processes d. Markets
a. Commodity approach
50. Scarcity in economics refers basically to
a. None of the above
b. Monopolization of resources to produce goods
c. Monopolization of existing supplies of goods
d. Monopolization of outlets to sell goods
51. Which of the following is not an economic good?
a. A space satellite
b. Free parking on the street
c. Sunlight
d. A free city concert in the park
52. Basic economic questions that any economy must
address
a. Where to obtain goods, how much must be paid
for them, when they must be consumed and
who can buy them
b. What and how much to produce, how to
produce them, and for whom the benefits of
production must go
c. Who must be the leader, where he/she must
stay, how much he/she will be paid and what
must he/she do
d. What, where, when and how production will
take place
53. Which of the following is a normative statement?
a. Price controls on oil and gasoline are only fair
b. If price controls are removed, the energy
shortage will be somewhat alleviated
c. A guaranteed annual income will have a
disincentive effect on work
d. The minimum wage law causes unemployment
among teenagers
54. Which of the following can be classified under
macroeconomic problem?
a. The annual salaries of government employees
b. All of the above
c. The Philippines balance of payment
d. The yearly inflation rate
55. The economic problem "What to produce?" refers
to
a. The way in which resources are combined in
order to produce the commodities
b. The amounts and types of commodities
produced in an economy
c. The beneficiaries from the choices made in a
society
d. The tastes and preferences of economic agents
56. The economic problem "How to produce?" refers to
a. The amounts and types of commodities
produced in an economy
b. The beneficiaries from the choices made in a
society
c. The tastes and preferences of economic agents
d. The way in which resources are combined in
order to produce the commodities
57. The economic problem "For whom to produce?"
refers to
a. The amounts and types of commodities
produced in an economy
b. The way in which resources are combined in
order to produce the commodities
c. The tastes and preferences of economic agents
d. The beneficiaries made from the choices made
in a society
58. Distribution in economics refers to
a. How to produce
b. What to produce
c. For whom to produce
d. Retailing, wholesaling and transportation
59. Which of the following best illustrates the notion of
economic cost?
a. In deciding to spend an evening with friends,
one is giving up time that could have been used
for studies
b. In eating at a fast food chain, one typically
spends anywhere from P60-P80
c. In the production of corn on a farm, the farmer
typically spends for the use of land, labor and
capital
d. To watch a movie in Rockwell, one has to spend
even more for transport
60. Which of the following best describes the term
"opportunity cost"?
a. Value of best foregone alternative
b. Benefits derived from a good or service
c. Costs of producing goods and services
d. Price paid for goods and services
61. What is the opportunity cost to you of driving to a
free rock concert in some outlying farm area?
a. There is none since the concert is free
b. The soft drinks you buy from the vendor on the
grounds
c. The cost of the gasoline
d. Enjoyment of the music
62. Factors of production
a. Inputs
b. Outputs
c. Only land and capital
d. Do not include labor
63. Assuming an economy is producing only rice and
vegetables, being on the possibilities frontier means
that
 a. More vegetables can be produced only by doing
without some rice
b. If the society becomes more productive in
producing rice, then we can have more rice but
not more vegetables
c. It is impossible to produce more rice
d. It is impossible to produce any more vegetables
64. If the economy is operating inside the production
possibilities frontier, then
a. The economy cannot produce more of one good
without giving up more of the other good
b. All the resources are used efficiently
c. The resources are not fully utilized in
production
d. The economy experienced technical change
65. Technological improvements will cause
a. An inward shift in the production possibilities
frontier
b. The production possibilities frontier to become
a straight line
c. The economy to specialize in the production of
one good
d. An outward shift in the production possibilities
frontier
66. The production possibilities frontier is concave
(bowed out) from below because
a. Of the law of diminishing returns
b. Productive resources are scarce and
transferable among industries
c. Of the principle of division of labor
d. Of the of increasing opportunity cost
67. Which of the following must be held constant in
drawing up a production possibilities frontier?
a. The allocation of resources among alternate
uses
b. The quantity of money
c. The total quantities of resources
d. Price
68. The law of increasing (relative) opportunity cost
expresses the fact that
a. Society must sacrifice ever-increasing amounts
of one good to get equal extra amounts of
another good
b. The society cannot be on its production
possibilities frontier
c. Labor unions tend to push up money wages
d. The government overspends and causes
inflation
69. A shift in the production possibilities frontier results
from
a. Changes in production techniques
b. Changes in the combination of goods produced
c. Inflation
d. Unemployment
70. The production possibilities of a country can be said
to shift outward as a result of which of the following?
a. All of the above
b. Expenditures on new plants and equipment are
constantly being made
c. The population increases
d. Better methods of production are developed
71. Which of the following is not a requirement for a
perfectly competitive market?
a. Many buyers
b. Many sellers
c. Free entry and exit
d. Advertising
72. The demand curve is typified by a(an)
a. Lesser percentage change in quantity
demanded relative to percentage change in
prices
b. Greater percent change in quantity demanded
relative to percentage change in prices
c. Inverse relationship between price and quantity
demanded
d. Positive relationship between price and
quantity demanded
73. The shortage of hybrid rice seeds raises prices of
seeds by virtue of
a. The downward-sloping demand curve
b. All of the above
c. The law of elastic demand
d. The law of diminishing returns
74. A change in which of the following will not change
the demand for rental housing?
a. Growth in the community
b. Incomes of consumers
c. Rental prices
d. Family size
75. Advertisements of Rejoice hot oil shampoo have
solicited an increase in the number of consumers that
use the product. From this we can conclude that
a. All of the above
b. The quantities demanded for Rejoice hot oil
shampoo will increase
c. The quantity supplied for Palmolive shampoo
will increase
d. The demand for Rejoice hot oil shampoo will
increase
76. During summer, sore eyes becomes a common
problem which causes an increase in the demand for
eyeglasses. In this case, demand is determined by
a. Expectation about the future
b. Changes in income
c. Changes in technology
 d. Changes in the tastes and preferences
77. An increase in price will lead to a lower quantity
demanded because
a. Some individuals purchase more of the good
b. Some individuals cut back their purchases of the
good
c. None of the above
d. Suppliers will supply only the smaller amount
78. One reason that the quantity demanded of a good
tends to rise as its price falls is
a. People feel a bit richer and increase their
demand for the good
b. Demand has to increase to restore equilibrium
after a price fall
c. At lower price, suppliers are willing to supply
more
d. The decrease in price shifts the demand curve
upward
79. The quantity of coffee bought in the market is likely
to increase when
a. The price of tea increases
b. Coffee is linked to cancer by new research
c. The price of coffee increases
d. The general income level of the population
drops
80. Which of the following will not cause a shift in the
demand curve for beef?
a. A change in the price of beef
b. An increase in incomes of beef consumers
c. A change in people's taste with respect to beef
d. A rise in the price of some goods which
consumers regard as substitute for beef
81. If there is negative relationship between the price of
good A and the demand for good B, then
a. Good B is an inferior good
b. Goods A and B are complements
c. Good B is a normal good
d. Goods A and B are substitutes
82. Studies revealed that margarine is an inferior good.
Therefore, an increase in income will result in
a. An increase in demand for margarine
b. An increase in the supply of margarine
c. A shift to the left of the demand curve for
margarine
d. A shortage of margarine
83. Market research has determined that during hard
economic times, sales of local canned sardines improve.
This indicates that
a. Imported sardines are bought only by rich
people
b. Canned sardine companies have effective
advertising campaigns
c. Local canned sardines are inferior goods
d. Petroleum prices have no effect on the market
for sardines
84. A drought would probably
a. Cause people to reduce their demand for wheat
b. Cause wheat suppliers to move up their supply
curves to a higher price
c. Induce a leftward shift in wheat's supply curve
d. Induce greater demand for wheat, yielding a
higher price
85. Diminishing returns implies
a. Downward-sloping demand curves
b. Upward-sloping demand curves
c. Downward-sloping supply curves
d. Upward-sloping supply curves
86. For any given price of good X, an increase in supply
of good X can be expected to be systematically caused
by
a. None of the above
b. Increases in the price of factors of production
important to this good
c. Decreases in the price of factors of production
important to this good
d. Increase in the price of other commodities
87. A market supply curve
a. Tells how sellers as a group will behave in a
perfectly competitive market
b. Always slopes downward
c. Can only be derived if the market is
nationalized
d. Can be obtained by adding the supply
curves of all the biggest sellers in this
market
88. The market supply of a product is said to increase
when
a. Its supply curve shifts to the right
b. The price of the product increases
c. Movie stars endorse it on TV
d. Its supply curve shifts upwards
89. Advertising agencies use popular movie stars to
endorse products because it is expected that doing so
will
a. Increase the supply of the product in the
market, thus raising its demand
b. Add prestige to the product, allowing the seller
to increase its price
c. Influence consumer tastes and preferences
towards the product
d. Strengthen the advertising industry
90. What is the difference between a change in supply
and a change in quantity supplied?
a. The first implies a shift of the supply curve
upwards, while the second implies a change in
the slope of the supply curve
 b. The first implies a shift in the entire supply
curve, while the second is just a movement
along the same supply curve
c. The first is a movement along the same supply
curve, while the second implies a shift of the
entire supply curve
d. Nothing, they mean the same thing
91. A price at which the quantities people wish to
produce exceeds the quantities that people wish to buy
(assume normal goods)
a. Lies above the equilibrium price
b. Will cause a shift in the demand curve
c. Lies below the equilibrium price
d. Will cause a shift in the supply curve
92. In a competitive market, price is determined
exclusively by
a. The costs of producing the good in question
b. The interaction of tastes and demand.
c. The supply of the good
d. The decisions of both buyers and sellers in the
market
93. If the demand schedule is written as P = 100 - 4Q
and the supply schedule is P = 40 + 2Q, the equilibrium
price and quantity are
a. P= 40, Q = 6
b. P = 20, Q = 20
c. P = 10, Q = 6
d. P = 60, Q = 10
94. Which of the following statements is incorrect?
(Assume upward sloping supply curve)
a. If demand curve shifts right and supply curve
shifts left, equilibrium price will rise
b. If demand curve shifts right and supply remains
constant, equilibrium price will rise
c. If supply curve shifts right and demand remains
constant, equilibrium price will rise
d. If supply curve shifts right and demand curve
shifts left, equilibrium price will fall
95. If market demand shifts sharply to the left as market
supply moves to the right, we would expect
a. Price to fall while quantity may or may not
change
b. Price and quantity to fall
c. Quantity to fall while price may or may not
change
d. The same price to prevail
96. In a standard supply-and-demand diagram, what
happens when demand decreases?
a. Quantity to fall while price may or may not
change
b. Price and quantity supplied rise
c. Price declines and quantity demanded rises
d. Price rises and quantity demands declines
97. A reason why long run supply curve slopes upward
and to the right is
a. People are not willing to pay a higher price for
more goods
b. Expanded industry output might cause a labor
shortage and subsequently a rise in the wage
rate and the cost of production
c. Expanded production may require the use of
superior resources
d. Extra production brings in more efficient, lower-
cost producers
98. Which of the following statements is incorrect?
Assume upward-sloping supply curves (Hint: try to draw
diagram)
a. If demand shifts left and supply increases,
equilibrium price will rise
b. If supply shifts right and demand shifts left,
equilibrium price will fall
c. If supply shifts left and demand remains
constant, equilibrium price will rise
d. If demand shifts right and supply shifts left,
price will rise
99. If you were a government official and wanted to
raise the price of soybean without imposing a price
support, which of the following actions would you take?
a. Encourage farmers to use more fertilizer on
their soybean-growing land
b. Encourage farmers to grow less soybean
c. Try to lower the price of milk
d. Take soybean from government storage and sell
it on the open market
100. If the economy is fully employed, an upward shift
in the demand schedule for asparagus alone
a. Will lead to an increase in the quantity of
asparagus supplied with consequent reductions
in the supply of other commodities
b. Will lead to a gradual fall in the price of
asparagus
c. Cannot change the output for asparagus
d. Will lead to inflation with not alternation in the
output of other commodities
101. Which of the following is least likely to have an
elastic demand?
a. Cars
b. Gasoline
c. Jewelries
d. Imported wine
102. Marginal product, mathematically, is the slope of
the
a. marginal product curve
b. average product curve
c. total product curve
d. input curve
103. The demand curve faced by a monopolist is
a. The same as the market demand curve
b. Perfectly inelastic
c. Upward sloping
d. Perfectly elastic
104. When marginal cost is increasing
a. Average total cost must be increasing
b. Average fixed cost might be increasing or
decreasing
c. Average total cost must be decreasing
d. Total cost must be increasing
105. The Law of Diminishing Marginal Productivity
a. All of these
b. Specifies that output obtained from the
successive utilization of an input decreases over
time
c. Specifies that the output obtained from the
successive input utilization increases over time
d. Specifies that as producers utilize successive
units of an input, the incremental output
derived from each additional unit decreases
106. Economies of scale
a. Exist when the long run average cost is
increasing at an increasing rate
b. Exist when the long run average cost is
decreasing at a decreasing rate
c. Occur when the increase in inputs causes a less-
than proportionate increase in output
d. Are represented by the declining portion of the
long run average fixed cost curve
107. The main difference between the short run and the
long run is that
a. In the short run, one or more inputs is fixed
b. In the long run, only one variable can be fixed
c. In the short run, all inputs are variable
d. The long run always refers to a time period of
one year or longer
Quantity of TC
Output
0 60
1 150
2 220
3 285
4 355
5 430
6 510
7 600
8 710
9 840
10 990
108. Average variable cost at the 8th level of output is
a. 60
b. 710
c. 650
d. 81.25
109. It is a common belief that monopolies charge any
price they want without affecting sales. Instead, the
output level for a profit-maximizing monopoly is
determined by
a. marginal cost = demand
b. marginal cost = marginal revenue
c. marginal revenue = demand
d. average total cost = demand
110. According the "Law of Diminishing Marginal
Returns", eventually,
a. Additional inputs will no longer generate
average output
b. Output must fall and then rise as additional
units of inputs are employed
c. The additional inputs necessary to produce an
additional unit of input will decrease
d. The additional output generated by additional
unit of an input will decrease
111. Diminishing returns is observed as a firm increases
production by adding variable inputs to at least one
fixed input because
a. The first must lower the price of its product
when it produces more units of output
b. The ability or quality of the variable inputs hired
decreases as more are hired
c. As more variable inputs are hired, the amount
of fixed inputs per variable input they have to
work with decreases
d. The per unit cost it must pay for variable input
increases as more inputs are hired
12. Profit maximizing output implies that
a. Marginal revenue = marginal cost
b. (Total revenue - total cost) is maximum
c. All of these
d. The slope of the total revenue curve is equal to
the slope of the total cost curve
113. Which of the following would contribute most to a
firm experiencing "economies of scale"?
a. Deterioration of information and control within
the firm
b. Rising long run average costs
c. Specialization of production within the firm
d. The law of diminishing marginal returns
114. In response to a cost-reducing technological
breakthrough in the production its product, a profit-
maximizing monopolist will
a. Increase price and reduce production
b. Decrease the price it charges for its product
c. Increase its output and practice price
discrimination
 d. Not change its level of output or price
115. A profit-maximizing firm in the short run will
expand output
a. Until total revenue equals total cost
b. Until marginal cost begins to rise
c. Until marginal revenue equals average variable
cost
d. As long as marginal revenue is greater than
marginal cost
116. When the total product falls
a. The average product is declining
b. The marginal product is zero
c. The average product is zero
d. The marginal product is negative
117. The cost that a firm incurs in purchasing or hiring
any factor of production is referred to as
a. Explicit cost
b. Fixed cost
c. Implicit cost
d. Variable cost
118. The economic incentive for a monopolist to
practice price discrimination depends on
a. A desire to evade government regulations
b. Prejudices of business managers
c. Differences among sellers' costs
d. Differences among buyers' demand elasticities
119. In the standard model of pure competition, a
profit-maximizing entrepreneur will close down in the
short run if
a. Total revenue is less than total variable costs
b. Average cost is greater than average revenue
c. Marginal cost is greater than average revenue
d. Average fixed cost is greater than average
revenue
120. In moving down the elastic segment of the
monopolist's demand curve, total revenue i
a. Increasing, and marginal revenue is positive
b. Decreasing, and marginal revenue is positive
c. Decreasing, and marginal revenue is negative
d. Increasing, and marginal revenue is negative
121. The following characterizes a monopolistic
industry, except
a. Complete control of inputs
b. The existence of franchises and patents
c. All of these
d. Complete control of technology
122. Given the supply curve for pork chops, a reduction
in the price of tender loin will tend to
a. Shift the demand curve for pork chops to the
right
b. Raise the price of pork chops
c. Shift the demand curve for tender loin to the
right
d. Lower the price of pork chops
123. Why are farm revenues higher in years of lower
production due to back weather?
a. Supply is inelastic; a leftward shift in supply will
increase total revenue
b. Demand is inelastic; a leftward shift in supply
will increase total revenue
c. Demand is more elastic than supply
d. Supply is perfectly elastic
124. If a monopolist is operating at an output level
where marginal revenue is positive, the firm
a. is operating on the elastic portion of its demand
curve
b. can always increase profits by lowering its price
c. could raise revenues by raising prices
d. has maximized total revenue
125. A monopolist which is maximizing short run profits
will produce
a. At the point on the demand curve where total
revenue is maximized
b. On the inelastic portion of the demand curve
c. Where marginal revenue exceeds marginal cost
by the largest amount
d. On the elastic portion of the demand curve
126. Suppose a monopolist calculates that at present
output and sales, marginal cost is P10.00 and marginal
revenue is P15.00. He or she could maximize profits by
a. Increasing price and decreasing output
b. Decreasing output and keeping prices
unchanged
c. Decreasing price and leaving output unchanged
d. Decreasing price and increasing output
127. A supplier in a purely competitive market is
characterized by all except one of the following
a. It can influence the price of its product
prevailing in the market
b. It produces such that marginal cost equals price
c. It can sell all it wants to at the prevailing market
price
d. It produces a positive amount in the short run if
it can recover variable costs
128. When the average variable cost of an output
exceeds the marginal cost, assuming there is at least
one fixed input, the average product
a. has been minimized
b. Of the input is greater than the marginal
product
c. of the input is less than the marginal product
 d. has been maximized b. A fall in price induces a percentage change in
129. The demand curve faced by the firm in a perfectly the supply curve
competitive output market is c. A percentage reduction in quantity reduces an
a. Horizontal increase in price along the demand curve
b. Upward-sloping d. Higher prices result from shifts in the supply
c. Vertical curve
d. Downward-sloping 137. "Coffee to me is an essential - I've got to have it no
130. Which of the following would make the demand matter what the price". This implies that for that
for a product elastic? particular individual from whom this statement was
a. It is considered a necessity quoted, his demand for coffee is
b. It is very cheap a. Cross price elastic
c. It has many possible uses b. Price inelastic
d. It is unique c. Price elastic
131. In the short-run, one would observe that as d. Perfectly price elastic
quantity of output increases 138. Which of the following statements is true given the
a. AFC will intersect with the X-axis total cost function: Total cost = 10Q + 5Q2 + 100
b. AFC is decreasing and asymptotic to the X-axis a. Average total cost at Q = 10 is 70
c. (AC-AVC) will also increase b. Average fixed cost is zero at Q - 100
d. TFC will increase c. Total cost at Q = 4 is 120
132. Which of the following is not true of a perfectly d. Total cost at Q = 5 is 175
competitive industry? 139. The cost that does not vary with output is
a. A large number of brand names of the product a. Average variable cost (AVC)
are available b. Total fixed cost (TFC)
b. There are a large number of sellers and buyers c. Total variable cost (TVC)
c. There is a perfect flow of market information in d. Total cost (TC)
the industry
d. Products and resources are freely mobile 140. The firm's short run marginal cost curve is rising
133. A firm's shut down point is the minimum value of when
a. Average cost a. Average fixed cost is decreasing
b. Total variable cost b. Total fixed cost is increasing
c. Average variable cost c. Marginal product is decreasing
d. Total cost d. Marginal product is increasing
134. If the price of a fixed factor of production increases 141. If the cross-price elasticity of demand between
by 50 percent, what effect would this have on the meat and fish is 2.50, we can say that
marginal cost schedule of a firm? a. Meat is a normal good
a. Marginal cost would increase by more than 50 b. Meat and fish are substitute goods
percent c. Meat and fish have elastic demand
b. None d. All of the three choices
c. Marginal cost would increase by 50 percent 142. Suppose a specific tax is applied to YAKULT drink.
d. Marginal cost would increase by less than 50 After the application of the tax, it was observed that the
percent consumers share 25% of the tax. What can you
135. The amount by which the firm's total revenue conclude about the price of elasticities of supply and
change when its output/sales are changed by one unit is demand?
called a. The elasticity of demand is equal to the
a. Average cost (AC) elasticity of supply
b. Marginal cost (MC) b. Demand is relatively more elastic than supply
c. Marginal revenue (MR) c. Supply is relatively more elastic than demand
d. Average revenue (AR) d. Demand is perfectly inelastic and supply is
136. Elasticity of demand is important because it shows perfectly elastic
how 143. If marginal costs decrease, a typical monopolist will
a. Total revenue changes when declining price a. Reduce price and increase quantity of output
induces rising quantity along the demand curve. b. Increase price and reduce quantity of output
c. Increase price and increase quantity of output
 d. Reduce price and reduce quantity of output
144. A basic difference between the firm in perfect (or
pure) competition and the monopoly firm, according to
economic analysis, is this
a. None of these
b. The perfect competitor can sell as much as he
wishes to some given price, whereas the
monopolist must lower his price whenever he
wishes to increase the amount of his sales by a
significant amount
c. The monopolist seeks to maximize profit,
whereas the perfect competitor's rule is to
equate price and average cost
d. The monopolist can always charge a price that
brings him substantial profit, whereas the
perfect competitor can never earn such a profit
145. Implicit costs are
a. Comprised entirely of variable costs
b. Payments for self-employed resources
c. Always greater in the short run than in the long
run
d. Equal to the fixed costs
146. In the first stage of production,
a. total product is increasing at an increasing rate
b. average product is increasing
c. average product is greater than marginal
product
d. marginal product is increasing
147. You hate washing dishes so you load up on paper
plates every time you shop No matter many paper
plates you hoard, you always pay the same price per
plate. To you, the supply curve of paper plates in each
period is
a. Unitary elastic
b. Perfectly elastic
c. Elastic
d. Perfectly inelastic
148. The short-run is
a. The planning period wherein all resources are
fixed
b. The planning period wherein all resources are
variable
c. A period of time shorter than one year
d. The planning period wherein some resources
are fixed
149. In the perfectly competitive sense, which of the
following is not true if P = ACmin?
a. The firm should continue producing
b. The firm is incurring losses
c. The firm is producing at output where P = MR =
MC = ACmin
d. The firm is just breaking even
150. All of the following curves are U-shaped except
a. The average fixed cost (AFC) curve
b. The average variable cost (AVC) curve
c. The marginal cost (MC) curve
d. The average cost (AC) curve
151. If a firm in circumstances of perfect competition
finds that at its best possible operating position, Total
Revenue is not sufficient to cover Total Variable Costs.
It should
a. Increase the price it is charging
b. Plan to shut down
c. Plan to continue operating temporarily
d. Continue to operate if, at this same level of
output, price per unit is sufficient to cover
Average Cost
152. Which of the following describes any firm at its
maximum-profit equilibrium?
a. The slopes of the Total Revenue and the Total
Cost curves are the same
b. The slope of the total profit curve is 1
c. Marginal revenue always equals Average
Revenue
d. Marginal Cost always equals Total revenue
153. As input increases, average fixed costs
a. first increase then decrease
b. decrease
c. increase
d. remain constant
154. If a store sells 500 bottles of perfume a month
when the price is P6 and only sells 460 bottles a month
when the price rises to P7, then the price elasticity of
demand is
a. 0.54 and elastic
b. 1.85 and elastic
c. 0.54 and inelastic
d. 1.85 and inelastic
155. An isoquant is best described as
a. The locus of points that gives the combination
of inputs that gives maximum profit
b. The locus of points that gives the technically
efficient combinations of inputs that yield the
same level of output
c. All of these
d. The locus of points that gives the combination
of inputs where total product is maximum
156. A total product curve indicates the relationship
between
a. output and price
b. input and variable cost
c. input and output
d. input and price
157. If a perfectly monopolized industry should become a. Would fall and the number of people riding
purely competitive without any change in cost buses would rise
conditions: b. Would remain unchanged
a. Both price and quantity produced will decrease c. Would fall
b. Price will decrease and quantity produced will d. Would rise
increase 165. If consumers have budgeted a fixed amount of
c. Price will increase and quantity produced will money to buy a certain commodity, and within a certain
decrease range of prices will spend neither more or less than this
d. Both price and quantity produced will increase amount on it, then their demand curve in this price
158. The short run marginal cost curve eventually rises range would probably be designated as
because of a. Perfectly elastic
a. Diminishing marginal productivity b. Highly elastic but not perfectly so
b. Economies of scale c. Unitary elastic
c. Increasing fixed costs d. Perfectly inelastic
d. Diseconomies of scale 166. When a firm is experiencing diseconomies of scale
159. When AVC is rising, which of the following is not a. It should increase the amount of labor it hires
always true? b. It should increase the size of its plant to
a. TFC is constant decrease the average total costs
b. TC is increasing c. Its average total costs will decline if it reduces
c. AC is increasing its scale of operation
d. MC is increasing d. It should lower its price to the competitive level
160. A vertical supply curve may be described as 167. The production function is a technical law which
a. Perfectly elastic a. relates physical outputs to physical inputs
b. Relatively elastic b. relates peso inputs to peso outputs
c. Relatively inelastic c. indicates the best output to produce
d. Perfectly inelastic d. indicates the best way to combine factors to
161. An example of a fixed cost produce any given output
a. Interest payments on a loan used to buy 168. Economies and diseconomies of scale explain why
equipment the
b. The labor cost incurred in employing casual a. long run average total cost curve is typically U-
unskilled workers shaped
c. Raw materials expenses b. short run average fixed cost curve declines so
d. Electricity bill long as output increases
162. The addition to total output resulting from c. marginal cost curve must intersect the
employing an additional unit of resource minimum point of the firm's average total cost
a. Total product curve
b. Average product d. short run average variable cost curve is U-
c. A production functions shaped
d. Marginal product 169. If we consider the cost associated with producing
163. At a price situation where AVC< P< AC, the firm will another unit of output, we are thinking of
decide to continue producing because a. AC
a. No, the statement is wrong and the firm should b. AVC
cease production c. MC
b. There are still customers willing to buy the d. TC
firm’s produce 170. A firm should continue to operate at a loss in the
c. Even at a loss, s/he can recover part of its short run if
variable cost and its fixed cost a. It can recover its variable costs and some fixed
d. Even at a loss, s/he can recover part of its fixed costs
cost and its variable cost b. The owner enjoys helping his/her customers
164. If DLTB raises bus fares causing riders to reach the c. The firm cannot produce any products more
elastic range of their demand curve for bus rides, DLTB's profitably
revenues d. The firm will show a profit
171. The short run supply curve of a firm in perfect
competition is the same thing as
a. The rising segment of its marginal cost curve
above the minimum average cost
b. The rising segment of its average cost curve
c. Its entire marginal cost curve
d. The rising segment of its marginal cost curve,
above the minimum average cost
172. A straight-line demand curve has which of the
following properties?
a. Constant elasticity and varying slopes
b. Constant slope and varying elasticity
c. Constant slope and constant elasticity
d. Varying slope and varying elasticity
173. A perfectly competitive firm produces output and
earns profit if
a. Price of output is less than average cost but
greater than average variable cost
b. Price of output is greater than average cost
c. Price of output is less than average variable cost
d. Price of output equals average cost
174. Marginal cost and average cost are related in this
way
a. when MC is greater than AC, AC is falling
b. when MC is equal to AC, MC is at a minimum
c. none of these
d. when MC is less than AC, AC is falling
175. At any level of output
a. Average variable cost will exceed average total
cost in the short run
b. Average variable cost will exceed average fixed
cost by the level of average total cost
c. Average total cost will exceed average variable
cost by the level of average fixed cost
d. Marginal cost will exceed average variable cost
by the level of average fixed cost
Price demanded Quantity
P2.00 100
P3.00 90
P4.00 70
P5.00 50
176. If price increased from P2.00 to P4.00, the elasticity
of demand would be
a. -0.53
b. -0.05
c. -20
d. -1.14
177. When the law of diminishing returns begins to
operate, the total variable cost (TVC) curve begins to
a. rise at an increasing rate
b. fall at a decreasing rate
c. fall at an increasing rate
d. rise at a decreasing rate
178. Which of the following does not necessarily apply
to a pure monopoly?
a. The firm must earn economic profits
b. The product the firm produces must have no
close substitutes
c. The firm must be the sole producer of a product
d. There must be high barriers to entry facing
potential competitors
179. A false reason to explain why a supply curve slopes
upward and to the right is
a. Expanded production brings in less efficient,
higher-cost producers
b. People are willing to pay a higher price for more
goods
c. Introduction of new technology
d. Expanded production may require the use of
inferior resources
180. Which of the following is a major criticism of a
monopoly as a source of economic inefficiency?
a. A monopolist fails to expand output to the level
where the consumers' valuation of an additional
unit is just equal to its opportunity cost
b. A monopolist has no incentive to produce
efficiently because even the inefficient
monopolist can be assured of economic profits
c. A monopolist will always make profits and that
means that prices are too high
d. A monopolist has an unfair advantage because
it can purchase labor at a lower price than
competitive firms in other industries
181. Given the same cost data, a monopolistic producer
will charge
a. A lower price, but produce a smaller output
than a competitive firm
b. A higher price and produce a larger output than
a competitive firm
c. A higher price and produce a smaller output
than a competitive firm
d. The same price and produce the same output as
a competitive firm
182. The boundary line between stage II and stage III of
production given one variable input is set where
a. Average product is maximum
b. Total product is diminishing
c. Marginal product is equal to zero
d. Marginal product is equal to average product
183. The coefficient-of-demand elasticity is
a. The quantity demanded divided by the change
in price
b. The percentage of change in quantity
demanded divided by the percentage change in
price
 c. The change in total revenue divided by the 188. Which of the following is not true of the total
change in price product curve?
d. Constant for all ranges of every demand curve, a. At the inflection point, MP is at is maximum
regardless of shape b. At stage 3, Total Product is decreasing
184. Given a downward sloping linear demand curve, c. If TP is increasing, MP < 0
when total revenue is decreasing, then marginal d. When Total Product is maximum, MP = 0
revenue is 189. If we consider the proportion of total expenditure
a. Negative and demand is elastic shared by each unit of output, we are thinking of
b. Positive and demand is elastic a. AC
c. Negative and demand is inelastic b. MC
d. Positive and demand is inelastic c. TC
Quantity of Output TC d. AVC
0 60 190. The marginal physical product of labor is
1 150 a. The output which it could produce unaided by
2 220 machinery or any other factors of production
3 285 b. The extra revenue which a firm will get by
4 355 selling the output of an additional worker
5 430 c. The amount of extra output that is produced
6 510 when one worker is added and other factors of
7 600 production are increased proportionally
8 710 d. The amount of extra output that is produced
9 840 when one worker is added and other factors of
10 990 production are increased proportionally
185. Marginal cost at the fourth level of output is equal 191. The demand curve faced by a purely competitive
to firm
a. 70 a. Has unitary elasticity
b. 60 b. Is one where average revenue equals marginal
c. 88.25 revenue
d. 650 c. Yields constant total revenue
186. When average product is declining, the marginal d. Is identical to the market demand curve
product could be 192. Which of the following would likely result in
a. Negative diseconomies of scale?
b. Zero a. The development of auxiliary services in the
c. Declining neighborhood
d. Any of these b. Adoption of new technology
c. Specialization of labor
Quantity of Output TC d. Management problem
0 60 193. The total amount of product produced divided by
1 150 the number of units of input used
2 220 a. Marginal product
3 285 b. None of these
4 355 c. Average product
5 430 d. Total product
6 510 194. An increase in supply will lower price unless
7 600 a. Supply is perfectly elastic
8 710 b. Both demand and supply are highly inelastic
9 840 c. Demand is perfectly elastic
10 990 d. Demand is highly inelastic
187. Total fixed cost is equal to 195. If price exceeds average variable cost but is smaller
a. 150 than average cost at the best level of output, the firm is
b. 0 a. Breaking-even
c. 90 b. Incurring a loss and should stop producing
d. 60 immediately
 c. Making a profit pricing of job or products that are non-routine and
d. Incurring a loss but should continue to produce difficult to value or cost in advance
in the short-run a. Mark-up pricing
196. A purely competitive industry is characterized by b. Target pricing or rate of return pricing
a. many small firms c. Production cost
b. Intensive advertising d. Cost-oriented pricing
c. Government intervention 202. A form of communication management that seeks
d. The existence of franchises and patents to influence the image of an organization and its
197. Economies and diseconomies of scale occur mainly product and service
because a. Public relation
a. Of the inherent difficulties involved in managing b. Advertisement
and coordinating a large business enterprise c. Personal selling
b. Firms in an industry must be relatively large in d. Sales promotion
order to use the most efficient production
techniques 203. Which of the following industries most closely
c. Of the law of diminishing returns approximates the perfectly competitive model
d. The short run average total cost curve rises a. Movie
when marginal products is greater than average b. Rice farming
total cost c. Postal service
198. When average variable cost is are a minimum d. Oil
a. Marginal cost is at a maximum 204. It refers to the unintended effect (beneficial or
b. The marginal product of the input is at a harmful) or production or consumption on other
minimum individuals not involved in production or consumption
c. The average product of the variable input is at a a. Externality
maximum b. Pollution
d. The average product of the variable input is at a c. Side effects
minimum d. Social cost
199. Compared to the competitive firm, monopoly 205. It refers to the share of the land used in the
a. Will always become competitive in the long run production of goods and services
because positive economic profits will induce a. Wage
competitions into the market b. Dividend
b. Is able to use barriers to entry to maintain c. Profit
positive economic profits in the long run d. Interest
c. Is efficient from society's perspective because it 206. A type of trading which specifies the minimum
has big plants and it uses the newest possible grade or particular grades of a commodity which must
production technology be delivered in fulfillment of the contract at some
d. Produces an equal amount of output, but future date
charges higher prices to cover all costs in the a. Future contracts
market b. Product sampling
200. The traditional AVC, ATC and MC curves are U- c. Reservations
shaped because in the short run, d. "Spot" or cash market
a. There is a phase of increasing productivity 207. Demand for the product is elastic. To increase
(falling unit costs) and a phase of decreasing total revenue, the seller should
productivity (increasing unit cost) of the a. Decrease the price of the product
variable factor (s) b. Increase the price of the product
b. All of these statements are true c. Increase quantity supplied
c. All costs are variable d. Not change the price of the product
d. A range of output levels can be produced by the 208. Price is determined by adding a desired rate of
firm at which per unit costs are at their return on investment to total costs
minimum levels a. Cost oriented pricing
201. Cost-plus pricing, where the costs of producing b. Target pricing or rate of return pricing
product or completing a project are totaled and a profit c. Return on investment
amount or percentage is added on. It describes the d. Mark-up pricing
209. This is unpaid media exposure about a firm or its c. Breakeven price
product and service d. Market price
a. Sale promotion 217. A basic cause of inflation is excessive
b. Publicity a. Supply
c. Public relation b. Demand
d. Advertisement c. Consumption
210. Pollution is an example of d. None of the above
a. Economies of scale 218. A simple bargaining between individual buyers and
b. Positive externality sellers for each transaction
c. Pecuniary externality a. Barter
d. Negative externality b. Individual negotiation
211. In long-run equilibrium, the pure monopolist can c. Commodity exchanges
make pure profits because of d. Auction house
a. High selling prices 219. Which of the following is the same for all points on
b. Low production costs an indifference curve
c. Blocked entry a. The prices faced by the consumer
d. Advertising b. The level of satisfaction obtained from
212. It is defined as the price paid for personal service in consumption
production c. The consumer's income
a. Interest d. All of the above
b. Wage 220. It is an oral presentation in a conversation with one
c. Profit or more prospective purchase/buyers for the purpose of
d. Dividend making sales
213. A type of trading which involves trading in actual a. Advertising
commodities, normally on the basis of samples b. Sales promotion
a. Future contracts c. Personal selling
b. Meet-up d. Publicity
c. Product sampling 221. The sales promotion can be effective if the buyer is
d. "Spot" or cash market price
214. Which of the following would be true if demand for a. Sensitive
the good is perfectly inelastic? b. Insensitive
a. A decrease in price will increase total revenue c. Unconscious
because consumers will double the quantity d. Unaffected
they will buy 222. If the firm stops operating, the loss is equal to
b. An increase in price will increase total revenue a. Total variable cost
because consumers will not react to the change b. Total fixed cost
in price c. Marginal cost
c. An increase in price will not change the total d. Opportunity cost
revenue because consumers will not react to 223. The main source of government revenues are
the change in price a. Fees
d. All of the above b. Taxes
215. The tool of public elation used to announce c. Fines
important scientific breakthrough or to explain the d. Licenses
details of corporate expansion 224. It is the quantitative expression of the power a
a. Company newsletter product has to attract other products in exchange
b. Press releases a. Value
c. Sponsored events b. Utility
d. Interviews and press conferences c. Price
216. The price that is equal to a firm's average variable d. Opportunity cost
costs, wherein the firm will no longer produce any 225. When the price of a commodity changes, the
output resulting income effect
a. Shut down price a. Always supports the law of demand only for
b. Marginal price normal goods
 b. Always supports the law of demand only for c. Advertising
inferior goods d. Publicity
c. Always supports the law of demand 233. This is a price reduction mechanism designed to
d. Supports the law of demand for normal and induce immediate purchase
inferior goods but not for Giffen goods a. Rebate
226. Means of identifiable effort on the part of the b. Coupons
seller to persuade buyers to accept the seller's c. Sampling
information and store it in retrieval form. Or it is the d. Premiums
company's attempt to stimulate sales by directing 234. Non-price competition often takes the form
persuasive communication to the buyers. a. Homogenous products
a. All of the above b. Price wars
b. Advertising c. Product differentiation
c. Publicity d. Collusion
d. Personal selling 235. Among the effects and widespread unemployment
227. The free samples of shampoo or soap are examples is
of a. Supply effect
a. Premiums b. Income effect
b. Rebate c. Substitution
c. Coupons d. None of the above
d. Sampling 236. A legally set price below the equilibrium price
228. Which is a characteristic of an oligopolistic a. Price control
industry? b. Price floor
a. Open market c. Price ceiling
b. Market situation with only one seller d. Subsidy
c. Market situation with only a few competing 237. The main difference between the long run and the
sellers short run is that
d. Market situation with one buyer a. In the long run, all inputs are fixed while in the
229. A term created to describe a situation of short run, all inputs are variable
simultaneous economic stagnation, high unemployment b. All inputs in the long run are fixed while in the
and inflation short run, one or more are variable
a. Inflation c. In the long run, some inputs are fixed while in
b. Depression the short run, one or two inputs are fixed
c. Deflation d. All inputs in the long run are variable, while in
d. Stagnation the short run, one or more inputs are fixed
230. A legally imposed price above the equilibrium price 238. It is marketing activities, other personal selling,
a. Price ceiling advertising, publicity to stimulate consumer purchasing
b. Price control and dealer effectiveness such as displays, shows and
c. Support price exhibition, demonstrations and various non-recurrent
d. Subsidy selling efforts not in the ordinary routine
231. If the income elasticity of the good is negative, we a. Consumer promotion
may conclude that b. Sales-force promotion
a. The good is an inferior good c. Sales promotion
b. The good is a substitute good d. Trade promotion
c. The good is a normal good 239. Giving a gift certificate or travel abroad to your
d. The demand curve for this good must be retailer is an example of
downward sloping a. Contest
232. Non-personal stimulation of demand for a product, b. Trade shows
service, or business unit by panting, commercially c. Incentives
significant news about it in published medium or d. Allowance
obtaining favorable presentation of it in radio, 240. A tax imposed upon the monopolist regardless of
television, or stage that is not paid for by one sponsor the output level
a. Selling a. Profit tax
b. Promotion b. Ad valorem tax
 c. Lump sum tax d. Total product is increasing
d. Specific tax 249. A management orientation that holds that the key
241. Changes in real wages are calculated by comparing task of the organization of producers is to determine
changes in money wages with changes in the the needs, wants and values of a target market and to
a. Cost of living adapt the organization to deliver the desired
b. Effort of work satisfaction more effectively and efficiently than its
c. Tax rate competitors
d. Rate of profits work a. Product concept
242. The marginal product of a variable input is the b. Societal marketing concept
a. Change in total output divided by the change in c. Marketing concept
total variable input d. Marketing management
b. Total output divided by total variable input 250. Economic principles can be presented in
c. Added output divided by the change in total a. Graphs
variable input b. Mathematical equation
d. Output per unit of variable input c. Tabular form
243. It is a set of significant institutions, individuals and d. All of the above
flows that connect the organization or individuals to its 251. The banner program for agricultural development.
markets It is a transitional blueprint for putting AFMA to work.
a. Middlemen a. Emergency Employment Program
b. Producers b. Ginintuang Masaganang Ani Program
c. Marketing system c. Comprehensive Agrarian Reform Program
d. Marketing facilities d. Urban Development Housing Program
244. Economics is a __________ science 252. An important difference between personal income
a. Social and personal disposable income consists of
b. Biological a. Dividends
c. Physical b. Investment income
d. All of the above c. Personal taxes
245. A formal organization of firms in an oligopolistic d. Personal wages
industry where decisions regarding output, price, sales 253. It involves contracting with sellers of inputs,
are made maintaining an adequate supply for production and
a. Partnership scheduling deliveries to the local plant
b. Corporation a. Product delivery
c. Cooperative b. Procurement
d. Cartel c. Marketing
246. Which of the following is not a source of aggregate d. Inventory
demand? 254. It refers to the relationship between the maximum
a. Savings amount of output that can be produced and the amount
b. Consumption expenditures of input required to make that output
c. Government expenditures a. Total physical product
d. Exports less imports b. Input productivity
247. It is a function performed on a product that alters c. Marginal product
its form, time, place or possession characteristics. It d. Production function
involved costs and adds value to the product (value 255. A management orientation aimed at generating
added) and somebody has to pay for it customers' satisfaction and long run consumer ad public
a. Production welfare as the key to satisfying organizational goals and
b. Utility responsibilities
c. Marketing a. Marketing management
d. Services b. Societal marketing concept
248. With labor as the variable input, when marginal c. Product concept
product of labor is zero d. Marketing concept
a. Total product is decreasing 256. The essential characteristics of capitalism
b. Total product is maximum a. Profit motive
c. Total product is minimum b. Economic freedom
 c. No private property 265. Stage III of the production function always begins
d. a and b where the
257. The using up of commodities to satisfy human a. Average product starts to decline
wants b. Average product is zero
a. Consumption c. Total product starts to decline
b. Distribution d. Marginal product starts to be negative
c. Production 266. This is a pricing strategy to gain more customers
d. Rationing while maintaining/holding the present ones (e.g. Odd-
258. The phase of the cycle wherein output and centavo pricing, even centavo pricing, price of P0.99
employment expand to full employment is etc.)
a. Trough a. Psychological pricing
b. Peak b. Unit pricing
c. Recovery c. Special pricing
d. Recession d. Price lining
259. The word market comes from this Latin word 267. Utilization of goods and services for the satisfaction
which means merchandise or trade or a place where of wants and needs
business is conducted a. Production
a. Marces b. Consumption
b. Marca c. Utilization
c. Marcatus d. Distribution
d. Marcitus 268. Goods which do not satisfy consumption needs
260. The cost incurred by a firm that varies with output directly but are used to meet the requirements of other
produced industries
a. Variable cost a. Consumption goods
b. Explicit cost b. Market goods
c. Opportunity cost c. Productive goods
d. Implicit cost d. Competitive goods
261. An organization/association who aids the various 279. Money balances held to need unforeseen
middlemen in performing their tasks, but do not directly contingencies is referred to as
participate in the marketing processes a. Real demand for money
a. Agent middlemen b. Speculative demand for money
b. Broker c. Precautionary demand for money
c. Market associations d. transaction demand for money
d. Facilitative organizations 270. Refers to both unsold products and unprocessed
262. Goods that are produced to satisfy consumption raw materials or other inputs
needs directly a. Inventory
a. Competitive goods b. Stocks
b. Productive goods c. Inputs
c. Consumption goods d. None of the above
d. Market goods 271. When AC is at a minimum
263. Reserve held by the bank over the legal reserve is a. TVC is maximum
called b. AVC = MC
a. Required reserve c. AFC is minimum
b. Excess reserve d. MC = AC
c. Interest rate 272. It is also termed as the arena for exchange
d. Neither a nor b between the buyer and the seller
264. The opposite of solvency and describes how much a. Market
of the total capital of the cooperative consists of debt b. Assembly centers
payable to creditors and banks c. Stock exchange
a. Loans d. Public auction
b. Indebtedness 273. Which item does not belong to the group?
c. Assets a. Economic theory
d. Net worth b. Descriptive economics
 c. Production economics a. Product sampling
d. Policy economics b. Intensification
274. The law which states that buyers are likely to buy c. Diversification
more goods and services as price decreases and buy less d. Product development
goods and services as prices rise 283. The term economies of scale is most closely related
a. Law of supply to
b. Law of diminishing returns a. Decreasing cost
c. Law of demand b. Increasing cost
d. Law of increasing cost c. Minimum cost
275. Nominal money supply is d. Constant cost
a. The peso value of the nation's money supply 284. The simplest forms of business organization is
b. Checking accounts at commercial banks a. Corporation
c. Peso value of the money supply over the price b. Cooperative
level c. Sole proprietorship
d. Flow of receipts per unit of time d. General partnership
276. It is essentially a set of guidelines for the group 285. It shows the physical relationship between the
enterprise level of inputs and the resulting output of goods and
a. Vision services
b. Business plan a. Production function
c. Mission b. Production possibility
d. Rules and regulations c. Indifference curve
277. When MP is maximum d. Demand curve
a. TP starts to increase at a decreasing rate 286. The demand for "necessities" tend to be
b. It is the point of inflexion of the TP curve a. Unitary elastic
c. AP is increasing and less than MP b. Perfectly elastic
d. All of the above c. Inelastic
278. Organizations that deal with business enterprise, d. Elastic
which is owned, patronized and managed by members, 287. Commodities that have been processed but require
is called further processing before they are made available to
a. Sole proprietorship the final consumer are called
b. General partnership a. Durable goods
c. Cooperative b. Intermediate goods
d. Corporation c. Crude materials
279. Which is not a variable input? d. Finished goods
a. Number of laborers 288. A method of cost covering with a fixed percentage
b. Interest of the sale's price deducted from the total sales
c. Bags of animal feeds proceeds
d. Level of fertilizer a. Tax
280. A market condition which causes price to increase, b. Share
decreasing the amount that each consumer is willing to c. Commission
buy d. Kick-back
a. Surplus 289. Total product divided by total cost is
b. Shortage a. Average product
c. Demand b. Marginal cost
d. Market equilibrium c. Average cost
281. Phase in the business cycle when economic d. None of the above
prosperity is experienced is the 290. The process of organizing resources to put an
a. Recession enterprise into existence, to run and manage it on a
b. Peak long term
c. Trough a. Business planning
d. Recovery phase b. Farm management
282. The introduction of new products or activities to c. Enterprise management
the cooperative d. Entrepreneurship
291. Which item does not belong to the group? a. A household's average holding of money for
a. Rent transactions is unrelated to its pattern of
b. Interest expenditure
c. Wage b. A household's average holding of money for
d. Pure profit transactions increases as the level of disposable
292. Meeting the needs of present generations without income increases
compromising the ability of future generations to meet c. A household's average holding of money for
their own needs transactions increases as the number of days in
a. Economic development a pay period increases
b. Economic growth d. None of the above
c. Economic freedom 300. The absorption of one association by another with
d. Sustainable development only the acquiring cooperative retaining its corporate
293. Keynes' fundamental law states that identity
a. The change in consumption is greater than the a. Merger
change in income b. Consolidation
b. The change in income is greater than the c. Bankruptcy
change in consumption d. Subsidiary
c. People stop consuming when they become 301. This marketing function addresses the problem on
affluent product seasonality. The primary aim is to help balance
d. None of the above consumption or periods of scarcity.
294. A union of two or more organizations which a. Processing
creates a new association and terminates the original b. Storage
organizations involved c. Packaging
a. Consolidation d. Pooling
b. Subsidiary 302. The behavior pattern of a firm in the industry
c. Bankruptcy a. Pure competitive market
d. Merger b. Market performance
295. The cost incurred by a firm in buying inputs is c. Market conduct
called d. Market structure
a. Implicit cost 303. Refers to the exchange of goods and services
b. Variable cost between one country and other countries
c. Explicit cost a. Domestic Trade
Opportunity cost b. Barter Trade
296, A firm based in one country but carries on c. Expo-Filipino Trade
production research or sales in other countries is d. International Trade
referred to as 304. A time when a company emphasized selling
a. National company because of increased competition
b. Local company a. Sale era
c. Multi-national company b. Marketing department era
d. International company c. Marketing company era
297. This is a cost of production d. Production era
a. Normal profit 305. The objective of a rational consumer is to
b. Maximum profit a. Avoid purchasing the most expensive
c. Economic profit commodities
d. Pure profit b. Spread his expenditures over as many products
298. Enterprise that utilizes a high ratio of labor or as possible
capital relative to a particular land resource c. Secure the highest of satisfaction from his
a. Intensive money income
b. Sustainable d. Buy as much as his income allows of the
c. Extensive cheapest articles
d. Subsistent 306. Period during which a borrower need not repay
299. Which of the following statements is correct? principal and sometimes, interest
a. Free period
 b. Non-payment period b. Least cost combination
c. Grace period c. Isoquant
d. Guarantee period d. Substitution principle
307. The export of a commodity at below costs or its 315. It refers to organization that requires goods and
sale abroad at a lower price than at home services which are used in the production of product
a. Import quota that they later sell at a profit
b. Free trade area a. Industrial market
c. Economic union b. Reseller market
d. Dumping Government market
308. It is the key link in the food systems, marketing c. Consumer market
chain connecting different production points and 316. When a firm sells its locally produced goods in a
consuming centers foreign country through an intermediary is called
a. Transportation a. Importing
b. Buying and selling b. Indirect exporting
c. Processing c. Indirect importing
d. Storage d. Exporting
309. A negative inflation rate or declining prices is 317. A fee received by individuals for endorsing a
known as product is called
a. Price shock a. Patent fee
b. Disinflation b. Franchise
c. Deflation c. Royalty
d. Reinflation d. Intellectual property rights fee
310. The anticipated reduction in the value of assets 318. __________ cost refers to any resource used in the
over time that is brought about through physical use or direct production
obsolescence a. Opportunity
a. Depreciation b. Marginal
b. Devaluation c. Explicit
c. Appreciation d. Implicit
d. Stagnation 319. It refers to the classification of buyers according to
311. Laissez faire means social class, lifestyle or personality characteristics
a. Absence of government concern in the market a. Behavior segmentation
b. Absence of government support b. Demographic segmentation
c. All of these c. Geographic segmentation
d. Absence of government intervention d. Psychographic segmentation
312. Inflationary pressure may be reduced by 320. A form of organization by a few firms in an
a. Increasing money supply oligopolistic industry with the objective of regulating
b. Raising income taxes the output, prices and behavior of members in the
c. Raising government spending industry
d. All of the above a. Purchasing
313. Economics is based on these two fundamental b. Sales
facts. c. Cartel
a. Resources are scarce d. Profit
b. Resources are scarce while human wants are 321. In production, this is the input considered as the
unlimited organizer and coordinator of labor and capital
c. Family income is limited while goods and a. Management
services to buy are limited b. Cooperative
d. Consumers would like to maximize their c. Corporation
satisfaction while producers would like to d. Firm
maximize profit. 322. Protection against imitators or copycats is known
314. The concept, which determines the combination of as
inputs that will produce a given output at the least a. Intellectual property rights
possible cost, refers to b. SEC registration
a. Inverse price ratio c. Patent
 d. Copyright d. Study of factors affecting changes in the price of
323. The objective or goal of a rational producer for firm oil
is 331. The 1991 Consumer Act of the Philippines is also
a. Sales maximization known as
b. Profit maximization a. Consumer Product Quality and Safety Law
c. Benefit maximization b. Product Safety and Quality Law
d. Cost maximization c. Consumer Quality and Safety Law
324. The monetary authority in the Philippines that d. Product Quality and Safety Law
governs the level of money supply through policies set 332. A type of middlemen or market intermediaries that
by the Monetary Board takes the title to and therefore own the products they
a. Business Trust Corporation handle in the marketing process
b. Central Bank of the Philippines a. Wholesalers
c. Philippine Trust Company b. Retailers
d. Allied Bank of the Philippines c. Middlemen
325. When the government controls the price of basic d. Merchant middlemen
goods 333. The exclusive right of an inventor for the control of
a. Interferes with the free market his invention for a period of some say, 20 years, is called
b. Motivates producers of these goods to produce a. Patent
more b. Monopoly
c. Discourages consumers to buy more of these c. Franchise
goods d. Royalty
d. All of the above 334. The CPI is designed to measure the degree to
326. Anything that can be offered to a market for which
attention, acquisition, use or consumption to satisfy a. Consumption patterns have changed with time
human needs and wants because of prices
a. Service b. Incomes are distributed among the poor and
b. Technology rich over time
c. Goods c. The cost of purchasing a bundle of consumer
d. Products goods has changed with time
327. The market equilibrium point for a commodity is d. Consumer prices have risen, relative to wages
determined by 335. A tariff expressed as a fixed percentage of the
a. The balancing forces of demand and supply value of imported product
b. The market demand a. Ad valorem tariff
c. The market supply b. Special tariff
d. All of the above c. Optical tariff
328. The real wage is equivalent to the normal wage d. Nominal tariff
adjusted for 336. The income that households are free to spend or
a. Income taxes save
b. Allowances and other benefits a. Savings
c. Inflation b. Gross national product
d. Income and business taxes c. Personal disposable
329. It is the selling of government-owned or controlled d. Gross domestic product
corporations and non-performing assets to the private 337. The exchange of goods and services across
sector international boundaries
a. Privatization a. Regional trade
b. Cooperativism b. Domestic trade
c. Corporativism c. International trade
d. Regulation d. Local trade
330. Which of the following is not a concern of 338. Which of the following cannot be used as synonym
macroeconomics? for another?
a. Study of aggregate supply and demand a. Free enterprise
b. Study of unemployment b. Command economy
c. Study of inflation c. Capitalism
 d. Price system c. Institutional approach
339. In economics, the term used to describe the d. Structure-conduct-performance-approach
persistent increase in the general price level 348. It refers to the corporate concern for social welfare
a. Interest a. Consumerism
b. Coordinate b. Social issue
c. Flux c. Environmentalism
d. Inflation d. Social responsibility
340. The most important characteristics of monopolistic 349. The form of economic integration that removes all
competition barriers on trade among member countries but each
a. Easy entry nation retains its own tariff rates against non-members
b. Many sellers a. Free trade area
c. Existence of non-price competition b. Economic union
d. Product differentiation c. Custom union
341. A study of a proposed project to indicate whether d. Economic market
the proposal is attractive enough to justify more 350. Represents the fraction of the labor force that
detailed preparation cannot find jobs
a. Technical study a. Birth rate
b. Market study b. Labor force participation rate
c. Financial study c. Employment rate
d. Feasibility study d. Unemployment rate
342. A payment made by a borrower to lender 351. It is a policy which defends domestic producers
a. Debt service from foreign competition
b. Debt a. Mercantilism
c. Principal b. Fiscalism
d. Interest c. Monetarist
343. The _______ is the unemployment rate that exists d. Protectionist
in normal times when there is neither a recession nor a 352. Which of the following best describes the
boom "Production Function"?
a. Frictional unemployment a. It indicates the best way to combine factors to
b. Structural unemployment produce any given product
c. Natural unemployment b. It relates peso inputs to peso outputs
d. Cyclical unemployment c. It indicates the best output to produce
344. The utilization of products d. It relates physical inputs to physical outputs
a. Production 353. The labor force is
b. Marketing a. Country's population
c. Consumption b. Country's population less the physically
d. Selling handicapped
345. Payments to international transactions can be c. Sum of the employed and unemployed
carried out through the use of the following instruments d. The working age population
except 354. The maximum amount of food and clothing that a
a. Cable or telegraphic transfers nation can produce using all its stock resources is
b. Bank drafts depicted by the nation's
c. Letter of credit a. Market supply curve
d. Personal check b. Indifference curve
346. An extreme high inflation is known as c. Isoquant curve
a. Stagflation d. Production possibility curve
b. Hyperinflation 355. These are considered scarce and to be paid for and
c. Super inflation are produced and needed by men to satisfy their wants
d. Meg inflation a. Intangible goods
347. Study of the various agencies and business b. Market goods
structure which perform the marketing processes c. Tangible goods
a. Commodity approach d. Economic goods
b. Functional approach
356. Point of consumption is the point of _____ sale b. Buying
a. Second c. Pricing
b. First d. Exchange function
c. Infinite 365. The Philips curve shows the relationship between
d. Last inflation and
357. Source of gains from trade a. The budget deficit
a. Resource endowment b. Unemployment
b. Forex c. The interest rate
c. Foreign investors d. The wage rate
d. Remittance 366. He organized the Rochdale Society of Equitable
358. System of compulsory contributions levied by a Pioneers and which gained him the title of Father of
government on persons, corporations and property, Cooperatives
primarily as a source of revenue for government a. Robert Roosevelt
expenses b. Robert Owen
a. Conscription c. Robert Lee
b. Philanthropy d. Robert Cruz
c. Subsidy 367. The father of economics is
d. Taxation a. Maynard Keynes
359. These are the various resources of labor, capital b. Adam Smith
and management that a producer or firm uses in the c. Peter Ducker
marketing process d. David Ricardo
a. Inputs of marketing 368. The set of all actual and potential buyers of goods
b. Packaging materials and services (products)
c. Labor cost a. Trading center
d. Transportation cost b. Middlemen
360. Acts as the grease in the marketing machinery c. Producers
a. Market behavior d. Market
b. Market intelligence 369. A type of middlemen that undertake some action
c. Facilitating function of production to change or alter the form of the product
d. Transportation a. Processors and manufacturers
361. These are individuals, institutions or organizations b. Financier-wholesalers
that facilitate the flow of goods and services between c. Jobbers
the producers and their final markets d. Grain millers
a. Processors/manufacturers 370. Any medium of exchange that is widely accepted in
b. Assemblers-wholesalers payment for goods and services and in settlement of
c. Retailers debts
d. Market intermediaries a. Bond
362. The cost that a firm incurs in purchasing or hiring b. Foreign exchange
any factor of production c. Money
a. Fixed cost d. Stock exchange
b. Variable cost 371. The locus of points each of which represents a
c. Implicit cost bundle of goods that can be purchased if the entire
d. Explicit cost money is spent is called
363. In economics, this work is defined as the creation a. Isoquant
of goods and services to satisfy human wants b. Budget line
a. Marketing c. Indifference curve
b. Production d. Supply curve
c. Consumption 372. This is the utility created when raw materials are
d. Transporting transformed into products
364. Marketing function that represents the point at a. Form
which the price determination is influenced in the b. Place
marketing process c. Time
a. Selling d. Possession
373. Scarcity is a permanent economic phenomenon, b. Satisfying Theory
shortage is c. Theory of Public Choice
a. Temporary d. Game Theory
b. Limited 382. It is an economic system associate more with the
c. Occasional political system of a strong one-man or junta
d. Short run dictatorship
374. The time from the beginning of project until the a. Feudalism
net value of the investment production stream totals b. Socialism
the amount of the investment of capital c. Marxist
a. Pay-back period d. Fascism
b. Recovery period 383. The addition of values to a product as it moves to
c. Operating period the consumer is called
d. All of the above a. Selling
375. Scarcity of capital relative to labor will induce b. Marketing
producers to use c. Distribution
a. More capital intensive techniques d. Production
b. More labor intensive techniques 384. Individuals or business concerns that specialize in
c. Capital and labor in the same amount performing the various marketing functions involved in
d. All of the above the purchase and sale of goods as they move from
376. Underground economy is conducted producers to consumers
a. On parts of entry a. Assemblers-wholesalers
b. Within legal boundaries b. Middlemen
c. Outside legal boundaries c. Merchant middlemen
d. Outside parts of entry d. Processors and manufacturers
377. A constantly increasing output or income per 385. People who do not have jobs as a result of sluggish
person per year of development economic activity are considered as part of
a. Economic profit a. Structural unemployment
b. Economic growth b. The underemployed workforce
c. Rural development c. Cyclical unemployment
d. Economics d. Frictional unemployment
378. The measure of responsiveness of quantity 386. The process of transformation of inputs into output
demanded or supplied to changes in price, income or a. Manufacturing
price of other related goods b. Consumption
a. Income elasticity c. Processing
b. Price elasticity d. Production
c. Elasticity 387. A deflationary gap can be eliminated by
d. Cross price a. Decreasing autonomous consumption
379. The performance of all business activities involved b. Decreasing investment
in the flow of goods and services from initial agricultural c. Decreasing government spending
production until they are in the hands of the ultimate d. Decreasing taxes
consumers 388. An approach used in analyzing economic situation
a. Sales function using value judgment
b. Marketing function a. Positive economics
c. Exchange function b. Microeconomics
d. None of these c. Macroeconomics
380. The fundamental problem faced by every economy d. Normative economics
a. Finite amount of factors of production 389. The business activity of selling goods and services
b. Scarcity to the final consumer
c. Limited supply of resources a. Distribution
d. All of these b. Wholesaling
381. The theory of how government spending decisions c. Selling
are made and how they should be made d. Retailing
a. Quantity Theory
390. A financial report that summarizes the revenues 398. The financial arm of the Agrarian Reform Program
and expenses of an enterprise during an accounting a. Bank of the Philippine Islands
period b. Land Bank of the Philippines
a. Financial statement c. Development Bank of the Philippines
b. Balance sheet d. Metrobank
c. Income statement 399. The social science concerned with the production,
d. Funds flow analysis distribution, consumption and exchange of goods and
391. The problems of what to produce, how to produce, services to satisfy human wants
and for whom to produce are automatically solved by a. Semantics
a. The use of computers b. Economics
b. The price mechanism c. Sociology
c. The economists of the country d. Anthropology
d. The president of the country 400. The building of skills of a firm's employees while
392. At a lower price, one can afford more of the good they work for the firm
without giving up any alternative good is true for a. Practicum
a. Substitution effect b. Investment on human capital
b. Income effect c. Skills formation
c. Neither a nor b d. On-the-job training
d. All of the above 401. In the short run period, all costs are
393. Which of the following is also known as RA 7394 a. Changing as output varies
which protects consumers against hazard to health and b. Variable
safely, unfair sales acts and the like? c. Fixed
a. Toxic Substance and Nuclear Waste Control Act d. None of the above
b. Retail Trade Liberalization Act 402. An equal increase in government spending and
c. Consumers Act of the Philippines taxes is likely to
d. None of the above a. Raise GNP by the amount of the given increase
394. It is a management orientation that assumes that b. Lower GNP by more than the given increase,
the consumer will normally buy enough of the depending on the value of the multiplier
company's product unless they are approached with a c. Indeterminate given the above information
substantial selling and promotion effort d. Leave GNP unchanged because the taxes cancel
a. Product concept out government expenditures
b. Marketing concept 403. If the multiplier is 2.5 and if I rises by 20 while G
c. Selling concept falls by 10 (ceteris paribus), by how much will the
d. Societal marketing concept equilibrium level of income change?
395. It is the ratio between a country's export and a. -25
imports b. 10
a. Balance of trade c. 25
b. None of these d. 50
c. Net export 404. An equal increase in government spending and
d. Balance of payment taxes is likely to
396. What utility is created when a carpenter constructs a. Leave GNP unchanged because the taxes cancel
a piece of furniture and displays it in his store along the out government expenditures
highway? b. Lower GNP by more than the given increase,
a. Place utility depending on the value of the multiplier
b. Time utility c. Raise GNP by the amount of the given increase
c. Form utility d. Indeterminate given the above information
d. All of the above 405. A tax cut shifts the Aggregate Expenditure schedule
397. An economy that is producing above its production (C + 1 + G)
possibility curve is a. Upward because it shifts the C component
a. Nonexistent downward
b. Maximizing satisfaction b. Upward because it shifts the C component
c. Maximizing profit upward
d. Minimizing loss c. Not at all
 d. Downward because it shifts the C component 414. By open market operations, we mean the actions
downward of the government to
406. A ___________ imposes a higher tax on high a. Buy and sell government bonds
incomes relative to low incomes b. Buy and sell investment goods and services
a. Lump sum c. Increase or decrease taxes
b. Progressive d. Increase or decrease government expenditures
c. Proportional 415. Balance of Payments deficits are always reflected
d. Regressive as
407. Money in a modern economy performs such a. An increase in foreign exchange reserves
function/s as b. A reduction in foreign exchange reserves
a. Medium of exchange c. An increase in money supply
b. Measure of value d. None of the above
c. Standard of deferred payment 416. Which of the following is consistent with a tight
d. All of the above monetary policy?
408. When bank lending interest rates are low, the a. Subsidized interest rates to borrowers
primary effect is to b. An increase in money supply
a. Discourage consumption c. High reserve requirements
b. Discourage investment d. Low interest rates
c. Encourage investment 417. The disadvantage of a barter system is that it
d. Encourage savings requires
409. The money multiplier indicates the change in a. It is pegged to the gold standard
_____________ from a unit change in the _______ b. The use of commodity money
a. Output: money supply c. A double coincidence of wants
b. Money supply: monetary base d. Immediate payment
c. Inflation rate: monetary base 418. The narrowest measure of money supply is called
d. Interest rate: money supply M1. It consists of currency plus
410. A devaluation refers to a. Time deposits
a. An increase in the value of foreign currency in b. Savings deposits
terms of domestic currency c. The amount of outstanding Government bonds
b. A decrease in the value of foreign currency in d. Checking deposits
terms of domestic currency 419. The need to have money for unforeseen
c. An increase in the value of domestic currency in circumstances is known as
terms of foreign currency a. Transactions demand for money
d. None of the above b. Precautionary demand for money
411. Money supply will normally increase when c. Speculative demand for money
a. BSP increases the reserve requirement d. All of the above
b. Government sells bonds to the public 420. It refers to how fast money is turned over in the
c. BSP lowers the discount rate economy
d. All of the above a. Monetary base
412. Monetary policy refers to government policies b. Quantity theory of money
related to c. Velocity
a. Wages and prices d. Currency to deposit ratio
b. Government expenditures and taxation 421. If the money multiplier is 4 and the monetary base
c. Investments increases by P100 million, money supply would increase
d. Money supply, credit and interest rates by
413. When the economy's money supply is high relative a. P100 million
to demand, this implies that credit conditions are easier b. P75 million
and therefore c. P400 million
a. Consumption is low d. P25 million
b. Savings is low 422. The quantity theory of money relates the price
c. Interest rate is high level and real output to
d. Interest rate is low a. The money base and the money multiplier
 b. The quantity of money and the velocity of a. Selling
money b. Transportation
c. The currency to deposit ratio and the velocity of c. Market intelligence
money d. All of the above
d. The quantity of money and the money 432. A dimension of market conduct
multiplier a. Degree of product differentiation
423. The need to have money for day-to-day expenses b. Firm's product policy
refers to the c. Degree of market knowledge
a. Transactions demand for money d. Goals of the society
b. All of the above 433. Makes possible the smooth performance of both
c. Precautionary demand for money the exchange and physical functions
d. Speculative demand for money a. Buying
424. ___________ is the rate BSP charges commercial b. Selling
banks when they borrow from it c. Transportation
a. Prime rate d. Market intelligence
b. Interbank rate 434. Desire for a product together with the capacity to
c. Rediscount rate buy that product
d. Overnight lending rate a. Demand
425. The series of services involved in moving the b. Income effect
product from the point of production to the point of c. Effective demand
consumption d. Income elasticity of demand
a. Marketing channels 435. Given assumption for the Law of Demand to work
b. Marketing a. Price is the only determining factor
c. Marketing functions b. Income, price of related products and
d. Marketing operations population affect quantity demanded
426. A system of buyers and sellers with facilities for c. Expectation of future prices and income
trading with each other determine quantity demanded
a. Supermarket d. All of the above
b. Pure competitive market 436. A movement along a demand curve means
c. Public market a. A change in quantity
d. Market b. A change in price
427. One who buys commodities from the market c. A change in quantity demanded
a. Consumer d. A change in demand
b. Customer 437. The effect of a price change is always negative as
c. Mother consumers tend to substitute other goods, resulting in a
d. Decision maker decrease in quantity demanded
428. Study of the various agencies and business a. Income effect
structure which perform the marketing processes b. Substitution effect
a. Structure-conduct-performance approach c. Inferior good
b. Functional approach d. Giffen paradox
c. Commodity approach 438. Other things being equal, an increase in the per
d. Institutional approach capita income of consumers will result in
429. Example of a merchant middleman a. A decrease in demand
a. Wholesaler b. A change in quantity demanded
b. Retailer c. An increase in demand
c. Broker d. A change in demand
d. Both a and b 439. If the elasticity of demand is less than 1, an
430. The behavior pattern of a firm in the industry increase in own price of a commodity will result in
a. Market performance a. No change in total revenue
b. Market conduct b. A decrease in the value of the elasticity of
c. Pure competitive demand
d. Market structure c. A decrease in total revenue
431. Acts as the grease in the marketing machinery d. An increase in total revenue
440. When the price of palay increases, total revenue of
the farmer also increases. From this, we can correctly
conclude that the demand for palay is
a. Inelastic
b. Elastic
c. Perfectly inelastic
d. Unitary elastic
441. If the elasticity of demand is less than 1, an
increase in own price of commodity will result in
a. A decrease in the value of the elasticity of
demand
b. No change in total revenue
c. A decrease in total revenue
d. An increase in total revenue
442. When the price of palay increases, total revenue of
the farmer also increases. From this, we can correctly
conclude that the demand for palay is
a. Perfectly inelastic
b. Inelastic
c. Elastic
d. Unitary elastic
443. A -0.60 income elasticity of demand for corn
implies
a. A decrease of 60 kg of corn consumed for every
1% increase in income
b. Less quantity demanded of corn as income
increases
c. Corn is a normal good
d. More quantity demanded of corn as income
increases
444. When the price of papaya increases by 30%,
quantity demanded decreases by 2%. What is the
absolute value of the elasticity of demand?
a. 0.67
b. 2
c. 1.5
d. 30
445. The coefficient of cross price elasticity of demand
for competitive products is positive since
a. An increase in the quantity of one good leads to
an increase in the price of other good
b. An increase in the quantity demanded of one
good results in a decrease in the price of other
good
c. An increase in the price of one good results in
an increase in quantity demanded for another
good
d. An increase in the price of one good results in a
decrease in quantity demanded for one good
446. under what condition will demand be likely elastic?
a. A newly marketed product
b. Perishable product
c. A product has many uses
d. All of the above
447. The short run supply curve of a perfectly
competitive firm is the
a. Portion of MC curve above minimum AC
b. Portion of MC above minimum AVC
c. Portion of MC above FC
d. Sum of all individual supplies
448. The supply curve for a given commodity will shift to
the right if
a. Competing or alternative commodities become
more profitable
b. A technological improvement results in a
decrease in per unit cost
c. The cost of producing the commodity increases
d. All of the above
449. The supply of an agricultural good will be inelastic
if
a. A slight change in cost incurred results in
greater increase in output
b. There is less time for the firm to expand
c. It is difficult to shift resources
d. b and c
450. Which of the following explains the differences in
the individual supply elasticities and market supply
elasticity?
a. Ease with which resources are shifted from the
production of one good
b. Capital investments required in the shift
c. Length of time to complete production
d. All of the above
451. That price at which the quantity per unit of time
that buyers want is just equal to the quantity that
sellers want to sell
a. Equilibrium price
b. Buying price
c. Selling price
d. None of the above
452. Reason why farm prices are more volatile than
non-food prices
a. Inelastic demand
b. Inelastic supply
c. Unpredictable changes in food supply
d. All of the above
453. Improvement in production technology, given a
constant demand function, will result in
a. Increase in supply and subsequently lower price
of the output
b. Increase in supply without any change in the
price of the product
c. Increase in supply and an increase in the price
of the product
d. None of the above
454. An improvement in production technology and a
simultaneous increase in population will result in
a. No change in the equilibrium price
b. An increase in the equilibrium price
c. The change in price largely depends on the
magnitude of the shift of the supply and
demand function
d. A decrease in the equilibrium price
455. An improvement in production technology and a
simultaneous decrease455. in population will result in
a. The change in price largely depends on the
magnitude of the shift of the supply and
demand function
b. No change in equilibrium price
c. An increase in the equilibrium price
d. A decrease in the equilibrium price
456. An increase in the population, without a change in
the supply function, will result in
a. An increase in price of the product as a result of
the increase in its demand
b. An increase in the demand for the product and
a subsequent decrease in its price
c. A decrease in the demand for the product and a
subsequent increase in its price
d. None of the above
457. Amount of money needed to acquire goods and
their accompanying services
a. Value
b. Utility
c. Price
d. Money
458. One of the essential functions of price
a. Tells producers what and how much to produce
b. Allocates productive resources to the
production of goods and services consumer’s
demand
c. Guides goods and services through the channels
of trade
d. All of the above
459. Price will tend to rise in response to
a. A sharp decrease in population with no change
in supply
b. A cost reducing technology, demand unchanged
c. An increase in income with no change in supply
d. None of the above
460. Type of price fluctuation associated with the long-
term changes in the factors affecting demand and
supply
a. Trend
b. Seasonal price variation
c. Cycles
d. Annual price variation
461. For a cyclical behavior or price and quantity to
occur as exemplified by the Cobweb mode, what
condition must be satisfied?
a. A time lag between the decision to produce and
actual production
b. Production plans are based on future prices
c. Current prices are mainly a function of future
supply
d. All of the above
462. Gives rise to a convergent Cobweb cycle in price
and quantity
a. Elastic supply
b. Elastic demand
c. Inelastic supply
d. b and c
463. The price differentials in perfectly competitive
markets are those caused by differences in
a. Time, form and location of the product
b. Promotion and advertisement
c. Marginal cost and revenue
d. Input and output prices
464. A simple bargaining process between individual
buyers and sellers for each transaction
a. Collective bargaining
b. Individual negotiation
c. Administrative pricing
d. All of the above
465. Prices established in organized markets
approximate equilibrium prices when
a. Number of transactions is large
b. There is government intervention
c. There are few buyers and sellers
d. There is no market information
466. Products that are produced in approximately fixed
proportions like coconut oil and desiccated coconut
from coconut
a. Competing products
b. Complements
c. Joint products
d. Substitutes
467. The major factor that influences the existence of
market channels
a. Structure
b. Increased efficiency
c. Organized transaction
d. Product delivery
468. To facilitate the proper functioning of the market
channel subsystem, it is important that channel
members must have a mutual understanding of their
a. Type of clients served
b. Territory served
c. Marketing functions performed
d. All of the above
469. Service output requirement c. Marketing margins, input-output
a. Delivery time measurements and evaluation of loss and waste
b. Lot size in the market
c. Product variety d. Both a and b
d. All of the above 478. Different components of marketing margin
470. Direct marketing is advisable if a. Transportation costs and processing costs
a. The total sales volume is small b. Marketing costs (or return to the factors of
b. The product is highly perishable production in providing the processing and
c. The product commands a high value per unit marketing services); marketing charges (or
d. The market is scattered returns to the various agencies or institutions
471. The type of organization which handles the involved in marketing)
product through two or more steps in the processing or c. Marketing costs and transportation costs
marketing processes d. Marketing costs and storage costs
a. Horizontal integration 479. Cost of storing agricultural products
b. Vertical integration a. Depreciation, repairs, insurance against loss
c. Forward integration b. Quality deterioration and shrinkage in volume
d. Backward integration c. Amount of capital invested in the stored
472. Convenience goods products plus handling fee
a. Require intermediaries d. All of the above
b. Unique and customized 480. The most important risk involved in the storage of
c. Staples food products
d. a and c a. Product deterioration
473. Demand for the finished products, e.g. dressed b. Insect and rodent damage
chicken, is called c. Physical loss
a. Primary demand d. Price change
b. Derived demand 481. Grading and standardization can result in economic
c. Consumer demand efficiency since it
d. a and c a. Increases the level of competition in the market
474. A series of figures representing the absolute b. Increases the meaningfulness of price
margins of different types of middlemen or assignable quotations
to different marketing functions divided by the retail c. Limits the time and expense of bargaining about
price price and quality for each transaction
a. Breakdown of the consumer peso d. Only a and b
b. Percentage margin 482. For a single consuming center for a farm product,
c. Constant margin the price received by the farmer will be
d. Percentage mark-up a. Pa -- ta = Pb – tb
475. A component of the marketing margin that refers b. Pa -- Pb = ta – tb
to the returns to the various factors of production used c. Pf = Pm -- f (D)
in providing the processing and marketing services d. None of the above
rendered between the farmers and consumers 483. Given the following on the price structure of
a. Marketing changes potatoes per 100 kg
b. Marketing costs Quality
c. Processing costs Size Grade AA Grade AB
d. Net return Grade BB
476. Reason why marketing costs differ among Large 1400 1300
agricultural products 1200
a. Increased processing Medium 1300 1200
b. Bulkiness 1200
c. Perishability Small 1200 1100
d. All of the above 1000
477. Marketing efficiency measures If the transportation costs are P300 and P400 from area
a. Pricing efficiency and operational efficiency A and B respectively, and other marketing costs are
b. Economic efficiency and technological efficiency
P750 and P850 respectively, the total costs of marketing c. 18.26
will be d. 8.70
a. P1050 and P1250 for Markets A and B 487. Given the following equation for milkfish: b = 3.14
respectively Y = 10.7 X = 2
b. P700 for Market A and P1600 for Market B The resulting trend equation for milkfish using the
c. P1150 for Market A and P1250 for Market B above information is
d. None of the above a. Y = 4.41 + 10.7X
484. Given the following on the price structure of b. 7.56 + 3.14X
potatoes per 100 kg c. Y = 4.42 + 3.14X
Quality d. Y = 10.7 + 3.14X
Size Grade AA Grade AB 488. Given the following equation for milkfish: b = 3.14
Grade BB Y = 10.7 X = 2
Large 1400 1300 Using this equation, the predicted average farm price of
1200 milkfish in year 1994 where 1980 = 1, 1981 = 2... is
Medium 1300 1200 a. 57.80
1200 b. 51.52
Small 1200 1100 c. 164.92
1000 d. 54.66
If the transportation costs are P300 and P400 from area 489. Given the following equation for milkfish: b = 3.14
A and B respectively, and other marketing costs are Y = 10.7 X = 2
P750 and P850 respectively, the produce will supply The slope (b) explains the
Market B with a. Average price increase per year amounting to
a. No small, grade BB potatoes p4.42
b. Only small Grade BB b. Average price increase per year amounting to
c. Only large Grade AA, Grade AB and medium p3.14
Grade AA c. Average price increase per year amounting to
d. All sizes and qualities of potatoes p7.56
485. Given the following on the price structure of d. None of the above
potatoes per 100 kg 490. Given the following equation for milkfish: b = 3.14
Quality Y = 10.7 X = 2
Size Grade AA Grade AB This particular problem made us think of a technique to
Grade BB project or predict future prices and this is known as
Large 1400 1300 a. Seasonal indices
1200 b. Statistical analysis
Medium 1300 1200 c. Demand analysis
1200 d. Simple linear regression analysis
Small 1200 1100 491. Industries that are concerned with manufacturing
1000 of industrial services engaged in production with total
If the transportation costs are P300 and P400 from area assets of more than 5M but not exceeding 51 and an
A and B respectively, and other marketing costs are employment size of 5-99 workers is a
P750 and P850 respectively, the producer will supply a. Large-scale industry
Market A with b. Medium-scale industry
a. Only large, Grade AA, Grade AB and Grade BB, c. Small-scale industry
medium Grade AA, AB d. Barangay-based microenterprise
b. All sizes and quality potatoes 492. Maximum profit is the same as maximum total
c. All sizes and quality of potatoes except small output. This statement is
Grade BB potatoes a. False
d. Only small Grade BB b. True
486. Given the following equation for milkfish: b = 3.14 c. Neither true nor false
Y = 10.7 X = 2 d. May be true and may be false
The estimated intercept is 493. The economic principle that seeks or helps to
a. 57.80 explain specialization of production or specialization of
b. 4.42 doing a particular activity
 a. Principle of Diminishing Returns c. Geographical Pricing
b. Principle of Increasing Cost d. Product bundle pricing
c. Principle of Diminishing Marginal Utility 502. The most common indicator of changes in the
d. Principle of Comparative Advantage general price level
494. Disposable income can either be spent on which a. Consumer price index
two items? b. Deflation rate
a. Consumption and savings c. Inflation rate
b. Savings and investments d. Interest rate
c. Consumption and investments 503. The volume handled by the farmers represents
d. None of the above their
495. A measure of the ability to repay long-term debt. a. Production + imports
One measure is the ratio net worth divided by total b. Production + consumption
assets c. Total production
a. Liquidity d. Marketable surplus
b. Durability 504. The agency which is mainly responsible to promote
c. Solvency the welfare of the fishery sector
d. Viability a. Bureau of Freshwater and Aquaculture
496. Which of the following costs declines as output Resources
increases? b. Bureau of Freshwater and Agricultural
a. Total fixed cost Resources
b. Average total cost c. Bureau of Fisheries and Aquatic Resources
c. Average variable cost d. All of the above
d. Average fixed cost 505. A price index of 125% means that the current price
497. A frequently used provision of labor contracts that is ______ higher than the price in the base year
grants wage increases based on changes in the a. 1.25%
consumer price b. 125%
a. Amelioration fund c. 100%
b. Cash gifts d. 25%
c. 13th month pay 506. Is similar to a function: flow describes the
d. Cost of living allowance (COLA) movement created by the performance of function in
498. Profit is _________ when the marginal revenue is the channel of distribution
equal to marginal cost a. Market flow
a. Minimum b. Market line
b. Positive c. Market distribution
c. Maximum d. Market link
d. Zero 507. A marketing function which does not only
499. The principal determinant of supply elasticity is encourage consumers to buy, but also to encourage
a. Demand them to buy more than what they need
b. Price a. Advertising
c. Supply b. Selling
d. Time c. Promotion
500. The ability to repay short-term debt (current d. Packaging
liabilities). One measure is the current ratio. 508. The program which is only focused to redistribute
a. Viability lands to eligible farmers
b. Liquidity a. Comprehensive Reform Program
c. Durability b. Land Reform Program
d. Solvency c. Cooperative and Development Agency
501. Pricing to promote a product is a very common d. Cooperative Development Administration
application. There are many examples of promotional 509. Which of the following criteria is used in classifying
pricing including approaches such as BOGOF (Buy One markets based on structure?
Get One Free) a. Homogeneity of products
a. Promotional pricing b. Types of sellers or buyers
b. Value pricing c. Location of market
 d. Taste and preferences of consumers 519. A cooperative organized to crease a source of
510. Asset demand for money is also known as loanable funds for useful purposes and to educates its
a. Speculative demand members in financial matters
b. Transaction demand a. Consumer cooperative
c. Precautionary demand b. Exclusive cooperative
d. None of the above c. Bargaining cooperative
511. Every time the government incurs a deficit, it must d. Credit union
borrow from the following except from the 520. GDP represents the
a. Foreign sector a. Market value of all goods and services produced
b. Religious sector by the economy at a given year
c. Private sector b. Market value of intermediate goods and
d. Public sector services produced by the economy at a given
512. Which of the following will be determined in the year
product market? c. Market value of all final goods and services
a. The price of a new pair of leather shoes produced by the economy at a given year
b. The price of a 30-hectare farmland d. Market value of all consumer goods and
c. The price of equipment used in a manufacturing services produced by the economy at a given
firm year
d. Manager's salary 521. A cooperative's proceeds, usually called net
513. If a country has a positive balance of trade savings, are returned to members in proportion to their
a. It has no deficit use of the cooperative - that is, according to the amount
b. Its debts have been paid they bought or sold to the cooperative
c. Its imports exceed exports in value a. Shares
d. Its exports exceed imports in value b. Stocks
514. When a government wishes to create excess c. Patronage refund
demand for foreign exchange, it basically adopts of d. Dividend
exchange rate 522. Most pricing policies adopted by the government
a. Depreciation are
b. Overvaluation a. Favoring urban consumers
c. Devaluation b. Distortionary
d. Deterioration c. Support farmers
515. Which do not belong to the group? d. All of the above
a. Taxes 523. Using the income approach in calculating the
b. Imports national income, which one is not included?
c. Savings a. Interest
d. Exports b. Profits
516. The law which promotes high value crops c. Wage
a. RA 6436 d. Depreciation
b. RA 7900 524. The arm of the government that oversees trade,
c. RA 3438 industry and investment activities
d. RA 6455 a. Department of Trade and Industry
517. Savings is an increasing function of b. Philippine International Trading Corporation
a. Interest c. Philippine Trade Training Center
b. Consumption d. Department of Tourism
c. Income 525. An example of non-current production is
d. Investment a. Purely financial transaction
518. Interest, the payment for the use of capital, is b. Underground economy
commonly expressed c. Second hand goods
a. In absolute amount d. All of the above
b. As a combination of percentage and absolute 526. A minimum wage rate higher than the market
amount wage rate results in
c. In percent a. Labor
d. None of the above b. An equilibrium in the labor market
 c. Labor surplus a. National Power Corporation
d. None of the above b. National Performance Coefficient
527. The monetary base of an economy is called c. National Protection Cofactor
a. High-powered money d. Nominal Protection Coefficient
b. Currency-deposit ratio 536. This marketing function addresses the problem of
c. Reserve-deposit ratio product seasonality, the primary aim of which is to help
d. Rediscount rate balance the period of plenty to the period of scarcity
528. It is a better indicator of the performance of an a. Pooling
economy among different time periods b. Storage
a. Real GNP c. Packaging
b. Nominal GNP d. Processing
c. Unadjusted GNP 537. The "Paradox of Thrift" states that
d. Money GNP a. Higher savings cause equilibrium income to
529. A point outside the production possibility frontier increase
indicates that given the technology and resources b. Higher savings cause a reduction in equilibrium
available, this combination is income
a. Attainable and is best for society c. Higher savings do not affect equilibrium income
b. Unattainable but best for society d. None of the above
c. Unattainable 538. The proportion by which the public holds money in
d. Attainable but inefficient the form of cash or deposits is called
530. Here, sellers combine several products in the same a. Currency-deposit ratio
package. This also serves to move old stock. b. Rediscount rate
a. Geographical pricing c. High-powered money
b. Product bundle pricing d. Reserve-deposit ratio
c. Promotional pricing 539. This approach is used when the marketer wants
d. Value pricing the consumer to respond on an emotional, rather than
531. The main recipients of redistributed lands by virtue rational basis. For example, 'price point perspective' 99
of CARP are cents, not one peso.
a. Agricultural Rehabilitation Centers a. Optional product pricing
b. Agricultural Reform Communities b. Captive product pricing
c. Agricultural Resource Committee c. Product line pricing
d. Association of Reformed Communities d. Psychological pricing
532. Which of the following groups is not penalized by 540. A sum of money taken out of a corporation's net
inflation? profits and paid to shareholders based on their equity
a. Debtors investment
b. Savers a. Share
c. Fixed money income groups b. Interest
d. Creditors c. Equity
533. The nominal GDP and the real GDP in a given year, d. Dividend
except the base year, differs because 541. This represents the liabilities of the Central Bank to
a. Of changes in the stock of capital the public sector in the form of currency in circulation
b. Of changes in the price level and to the banking sector in the form of cash reserves
c. Of improvement in technology a. Reserve money
d. Of the exclusion of intermediate goods b. Rediscount rate
534. Homogenous product means that c. Time deposit
a. The product of one seller is a perfect d. Interest rate
complement for another seller's product 542. Consumption is influenced by several factors
b. The product of each seller is unique except the
c. The product of each seller is different a. Rate of interest
d. The product of one seller is a perfect substitute b. Technology
for another seller's product c. Price level
535. The extent of protection of agricultural outputs is d. Taxes
measured by
543. Investment is determined by the following factors c. Sale of marketable securities like bonds and
a. Interest rate stocks
b. Marginal efficiency of investment (MEI) d. None of the above
c. Price level 552. Using the product or expenditure approach in
d. Both a and b calculating the GNP, which one is not included?
544. Which item does not belong to the group? a. Net exports
a. Adjusted GNP b. Indirect business taxes
b. Nominal GNP c. Government purchase of goods and services
c. GNP at current price d. Household consumption expenditures
d. Unadjusted GNP 553. Marginal revenue = Average product = Price of
545. In the long-run period of production process, all output is true for
costs are a. Perfect competition
a. Variable b. Oligopoly
b. Fixed c. Imperfect competition
c. None of the above d. Monopolistic competition
d. Constant 554. Macroeconomics may be divided into four sectors
546. An example of illegal transaction except
a. Sale of illegal drugs a. Money sector
b. Gambling b. Public sector
c. Prostitution c. GNP sector
d. All of the above d. Unemployment and inflation sector
547. It measures the degree given to value added of 555. A development strategy which is designed to
agricultural sector promote domestic industry to replace imports
a. Effective Prevention Ration a. Outward-looking development
b. Effective Protection Reconnaissance b. "Basic needs" strategy
c. Effective Protection Rate c. Inward-looking development
d. None of the above d. Balanced development
548. Money serves as a 556. The simplest product flow is
Store of value and standard for deferred payment a. F-AW-WR-C
a. Unit of account b. F-CB-R-C
b. Medium of exchange c. F-WR-C
c. All of the above d. F-WR-R-C
549. Charge a high price because you have a substantial 557. The performance of the foreign trade is not
competitive advantage. However, the advantage is not determined by
sustainable. The high price tends to attract new a. Foreign policies
competitors into the market, and the price inevitably b. Trade laws
falls due to increased supply. c. Demand for goods
a. Price skimming d. Restrictions
b. Premium pricing 558. A statement showing the assets, liabilities and net
c. Economy pricing worth (or owner equity) of a business on a specified
d. Penetration pricing date, usually the end of the year
550. It refers to the control of resources of the country a. Ledger
by its own people to ensure its own utilization primarily b. Record notebook
for their own interest and enjoyment c. Record keeping
a. Patriotism d. Balance sheet
b. International trade 559. Evident where there are variations in price in
c. Economic nationalism different parts of the world. For example, rarity value,
d. Economic liberalism or where shipping costs increase price
551. Which among the following transactions should be a. Promotional pricing
included in the computation of GNP? b. Value pricing
a. Sale of second-hand automobile c. Geographical pricing
b. Sale of agricultural products like vegetables and d. Product bundle pricing
cereals
560. The legal method to reduce taxes owed to the d. Levies
government is called tax 569. Andrew is able to help negotiate the purchase
a. Rebate process while uniting buyers and sellers. The greatly
b. Evasion value his expertise, and he does not have to buy the
c. Incentive products in order to resell them. Andrew is a
d. Loophole a. Drop shipper
561. It concerns with the allocation of economic b. Commission merchant
resources among countries c. Truck wholesaler
a. Production d. Broker
b. Economic nationalism 570. It refers to the exchange of goods and services
c. International economics between one country and other countries
d. International trade a. Barter system
562. Which among the following is not a source of b. International trade
monopoly power? c. Selling
a. Ownership of a patent d. Exchange rate
b. Control over supply of raw material 571. An association of local cooperatives in which the
c. Free entry to the industry local associations elect a board of directors to govern
d. Product being produced has no close substitute the central association, with the locals retaining their
563. The variation (up and down) in national income is autonomous character
affected by a. Credit union
a. Savings b. Corporation
b. Population c. Cartel
c. Investment d. Federation
d. All of the above 572. The _____ reflects the current and capital accounts
564. A demand for wage increase can cause of a country vis-a-vis other countries
a. Demand-pull inflation a. Balance of trades
b. Both demand-pull inflation and cost-push b. Balance sheet
inflation c. Balance of payments
c. Cost-push inflation d. Balance of tariffs
d. None of the above 573. A cooperative whose sole or principal function is to
665. A schedule which shows the various amounts bargain for terms of sale. It does not handle the actual
households plan to save at various levels of income products as an operating cooperative does
a. Demand function a. Farm supply cooperative
b. Investment function b. Bargaining cooperative
c. Savings function c. Exclusive cooperative
d. Consumption function d. Consumer cooperative
566. Real income includes 574. A situation in which the absolute value of the price
a. Legal services elasticity coefficient is less than one
b. Television a. Kinked demand curve
c. Foods b. Perfectly elastic demand
d. All of the above c. Inelastic demand
567. The process of transferring the output of a d. Elastic demand
production process to the different sectors of the 575. Marginal utility
economy a. Is the extra output a firm obtains when it adds
a. Transportation another unit of labor
b. Selling b. Typically rises as successive units of a good are
c. Marketing consumed
d. Distribution c. Explains why product supply curves are
568. The main subject of GATT-WTO organization is the upsloping
reduction of d. Is the extra satisfaction from the consumption
a. Tariffs of one more of the same good or service
b. Subsidies imposed on agricultural products 576. The curve that plots the relationship between the
c. Quantitative restrictions quantity of a good consumed and income
 a. Production curve a. Progressive tax
b. Income consumption curve b. Proportional tax
c. Product possibility frontier c. Regressive tax
d. Engel curve d. All of the above
577. It is a marketing activity which involves the sorting 585. Any price lower than ATC but higher than AVC is
of products into lots or units according to one or more a. Loss minimization
of their quality attributes b. Shutdown condition
a. Branding c. Profit maximization
b. Standardization d. None of the above
c. Grading 586. Using marginal approach, the firm will maximize
d. Packaging profit or minimize losses by producing at the point
578. The strawberries of Benguet can be bought in the where
supermarkets of Manila. What utility was created in a. Total revenue = total cost
this situation? b. Marginal revenue = marginal cost
a. Possession utility c. Marginal cost = marginal product
b. Time utility d. Marginal cost = marginal utility
c. Form utility 587. Specialization and division of labor will likely result
d. Place utility in
579. For the country to be industrialized, the strategy a. Diseconomies of scale
should be b. Economies of scale
a. Business-based c. Law of diminishing marginal returns
b. Import-based d. Any of the above
c. Agri-based 588. The change in equilibrium income as a result of a
d. Export-based one-peso change in the autonomous component of
580. This marketing situation involves the establishment aggregate expenditure
and maintenance of uniform measurement. This a. Multiplier
function also simplifies buying and selling, since it b. Marginal propensity to consume
makes possible the sale by sample and description. c. Marginal propensity to save
a. Risk-bearing d. None of the above
b. Market intelligence function 589. They are those individuals or business concerns
c. Standard function that specialize in performing the various marketing
d. Financing function functions involved in the purchase and sale of goods as
581. A measure of determining which resource a they are moved from producers to consumers
country to use abundantly in order to be competitive in a. Processors
the export market b. Farmers
a. Rice and Corn Administration c. Middlemen
b. Record Company of America d. Consumers
c. Revealed Comparative Advantage 590. The interest rate that Central Bank charges
d. Resonance Competitive Advantage commercial banks is called
582. It provides climate for enhancing competitiveness a. Market interest rate
and food security of the country b. Rediscount rate
a. High Valued Commodity Crops Act c. Reserve requirement
b. High Valued Commercial Crops Act d. Fiat money
c. High Valued Corn and Crops 591. One rule in the production or product particularly
d. All of the above in the short run period, if total revenue is greater than
583, The regulatory agency responsible to register and variable cost, the business must
monitor cooperatives a. Shutdown
a. Cooperation and Development Agency b. Operate
b. Cooperative Development Authority c. Indifferent
c. Cooperative Development Administration d. a and b
d. All of the above 592. Which item does not belong to the group?
584. It is a tax based on a percentage of income that a. Real GNP
varies inversely with the level of income b. GNP at constant price
 c. Adjusted GNP c. Tiller
d. Unadjusted GNP d. Tenant
593. The change in consumption spending that arises 601. A family spends P2,000 on consumption goods
from a one-peso change in disposable income when its income is zero and P6,000 when its income is
a. Marginal propensity to save P6,000. Assuming a linear consumption function, what
b. Marginal propensity to consume is the family's autonomous consumption equal to?
c. Multiplier a. P1,000
d. None of the above b. P6,000
594. All these agencies are involved in improving c. P2,000
agricultural production except d. P3,000
a. Court of Agrarian Relation 602. Marginal revenue product describes the
b. Department of Trade and Industry a. Revenue received for the last unit of output
c. Department of Agrarian Reform produced
d. Department of Environment and Natural b. Revenue received for the output produced by
Resources the last unit of input employed
595. The satisfaction obtained from the goods and c. Price a consumer paid for the last unit of output
services that consumer consumes produced
a. Demand d. Output produced by the last unit of the input
b. Consumption used
c. Utility 603. All of the following will increase measured GNP
d. Superior goods except for
596. The ownership interest of a company's members or a. A large number of families suddenly decided to
stockholders as distinguished from that of bond holders more frequently eat out rather than at home
or lenders, total assets less total liabilities b. Within the year, thousands of men marry their
a. Interest housemaids and stop paying them salaries
b. Dividend c. Marijuana trade is legalized by the government
c. Equity d. All of the above will increase measured GNP
d. Share 604. If aggregate saving is zero, aggregate consumption
597. Strengthened the implementation of CARP must be
a. RA 7908 a. Equal to income
b. RA 7907 b. Less than income
c. RA 7906 c. Greater than income
d. 7905 d. Zero
598. It refers to any activity that uses resources today 605. The demand for labor will decrease in response to
allowing for greater production in the future, and a. better training of all laborers
hence, greater consumption b. a decrease in the supply of labor
a. Inventory c. decreased demand in markets for consumer
b. Deposit goods and services
c. Investment d. increased productivity
d. Saving 606. The marginal propensity to consume is the ratio of
599. It is one type of middleman in agricultural a. Extra consumption to total income
marketing whose function, in modern, times, have b. Extra consumption to extra income
increased from challenging product forms to buying raw c. Total consumption to total income
materials to wholesaling the finished product to d. Total consumption to extra income
retailers 607. An inflationary gap exists when
a. Processors and manufacturers a. Full employment income is higher than
b. Wholesalers equilibrium income
c. Facilitative organization b. Full employment income is the same as the
d. Assembler-wholesaler equilibrium income
600. Land reform is intended to place the ownership of c. Full employment income is lower than
land in the hands of the equilibrium income
a. Landlord d. Aggregate expenditure is less than full
b. Lessee employment income
608. The most important consequence of an inflationary a. Sum of incomes of factors of production
gap is b. Expenditures on final goods and services
a. Production increases c. Sum of expenditures on intermediate goods and
b. A rise in consumption expenditures services
c. An increase in real GNP d. Sum of wages paid to labor only
d. Price increases 617. If the factor of production has many close
609. A decline in real GDP that lasts for at least six substitutes, we would expect that its price elasticity of
months is called a demand would be
a. Recession a. Less than one
b. Peak b. Greater than one
c. Recovery c. Unitary
d. Trough d. Unimportant
610. If the national government's revenues exceed 618. Inflationary pressure may be reduced by
expenditures, the government has a a. Raising government spending
a. Financing account b. Increasing money supply
b. Budget surplus c. All of the above
c. Balanced budget d. Raising income taxes
d. Budget deficit 619. Nominal GNP in 1990 was estimated at P500
611. The balanced budget multiplier is equal to billion. If the consumer price index in 1990 using 1988
a. --mpc/(1-mpc) prices is equal to 125, then real GNP for 1990 must be
b. 0 a. P265 billion
c. 1/(1-mpc) b. P400 billion
d. 1 c. None of the above
612. Suppose you were given the data below on income d. P125 billion
(Y) and consumption (C) expenditures in billion pesos 620. If lump sum taxes were to be reduced by 20 when
Y 0 100 200 300 400 500 600 700 800 900 the marginal propensity to consume is 2/3, the
C 30 120 210 300 390 480 570 660 750 840 equilibrium income would
The value of the multiplier is a. Cannot be determined from the data
a. 10 b. Fall
b. 4 c. Rise by 40
c. 6.67 d. Rise by 20
d. 5 621. The imposition of a per unit tax causes the
613. An extremely high inflation is known as monopolist's
a. Super inflation a. average cost curve alone to shift up
b. Mega inflation b. average cost and marginal cost curves to shift
c. Stagflation up because the per unit tax is like a fixed cost
d. Hyperinflation c. average cost and marginal cost curves to shift
614. Suppose you were given the data below on income up, because the per unit tax is like a variable
(Y) and consumption (C) expenditures in billion pesos cost
Y 0 100 200 300 400 500 600 700 800 900 d. All of the above
C 30 120 210 300 390 480 570 660 750 840 622. People who do not have jobs as a result of sluggish
The consumption function of the above is economic activity are considered as part of
a. C = 0 + .9Y a. The underemployed workforce
b. Y = 30 + .75Y b. Cyclical unemployment
c. C = 30 + .9Y c. Frictional unemployment
d. C = 300 + .9Y d. Structural unemployment
615. Cost push inflation may be caused by 623. Which of the following best explains the
a. Lower business spending expenditure multiplier effect?
b. Higher labor costs a. New expenditures tend to stimulate more taxes,
c. Higher budget deficits thereby increasing output even more
d. Lower government spending b. New expenditures become another round of
616. In the upper loop "flow of product" approach, GNP income, which in turn becomes another round
is obtained as the sum of of expenditures and incomes, and so on
 c. New expenditures tend to raise the level of
exports, which in turn stimulates the economy
into even greater production
d. New expenditures lead to new government tax
revenues which finance output-increasing
government projects
624. Other things being equal, the demand for a factor
of production will be less elastic if the demand for final
product it produces is
a. Inelastic
b. Unitary elastic
c. Elastic
d. Perfectly elastic
625. Imposing a minimum wage higher than the
equilibrium wage in a competitive industry would
a. Increase employment in that industry
b. Decrease the quantity of labor supplied to that
industry
c. Increase the income of some workers already
employed in that industry
d. Increase the demand for labor in the industry
626. Marginal resource cost is
a. The increase in fixed costs resulting from one
more unit of output
b. The increase in variable costs resulting from one
more unit of output
c. The same as wage rate when the firm is hiring
labor under purely competitive conditions
d. Perfectly inelastic for a monopsonist
627. Double counting of national product would result
from adding
a. Value added by flour mills and value added by
bakeries
b. Total sales of flour mills and total sales of
bakeries
c. Value added by flour mills and total sales of
bakeries
d. None of the above
628. An economy's real GNP measures the
a. Value of all goods and services produced during
a particular time period when all prices are held
constant
b. Value of all investment goods and services
produced during a particular time period when
all prices are held constant
c. Market value of all investment goods and
services produced during a particular time
period
d. Market value of all goods and services produced
during a particular time period
629. Using the value-added approach, GNP is obtained
as the sum of the value added of each agricultural firm,
taking care not to include
a. Cost of intermediate inputs
b. Personal taxes
c. Indirect business taxes
d. Transfer payments
630. The demand for a productive resource is said to be
"derived" because the demand for the input
a. depends on the demand for the product it is
used to make
b. is derived from government policy
c. depends on the demand for a complementary
input
d. is derived from the state of the economy
631. The Paradox of Thrift illustrates how society's
decision to same more
a. Increases national output
b. Reduces consumption spending
c. Raises investment spending
d. Reduces national output
632. If two inputs are complementary and employed in
fixed proportions, an increase in the price of one input
will
a. increase in the quantity demanded for the other
input
b. increase in the demand for the other input
c. decrease in the demand for the other input
d. have no effect on the demand for the other
input
633. Which of the following would be considered a
leakage from the circular flow?
a. Exports
b. Consumption
c. Imports
d. Investments
634. The difference between GNP and Net National
Product (NNP) is accounted for by
a. Depreciation
b. Indirect business taxes
c. Personal taxes
d. Government transfers
635. The government's total revenues are divided into
a. Tax and non-tax revenues
b. Tax and import duties
c. Income tax and tax on property
d. VAT and income tax
636. Gross National Product (GNP) includes
a. Services of farmers coursed through the
markets
b. Government transfer payments
c. Gains from illegal transactions arising from rice
importation
d. Receipts from sales of second-hand tractors
637. A firm's demand curve for labor
 a. will shift to the left if the price of the product d. The cost of purchasing a bundle of consumer
the labor is producing should fall goods has changed with time
b. is perfectly elastic if the firm is selling its 644. The real wage is equivalent to the nominal wage
product in a purely competitive market adjusted for
c. is the marginal physical product curve a. Inflation
d. reflects a direct (positive) relationship between b. Income taxes
the number of workers hired and the money c. Income and business taxes
wage rate d. Allowances and other benefits
638. Which of the following adjusts in order to assure 645. Other things being equal, the elasticity of demand
that the expenditures on final products would equal the for labor will be greater the
sum of incomes to the factors of production a. Smaller the proportion of total costs
Wages and salaries accountable by labor costs
a. Profit b. Larger the number of close substitute resources
b. Rent available
c. Interest c. More rapid the decline in its marginal
639. If all firms in an industry are price takers in the productivity
market for resource A, then all of the following are true d. Smaller the elasticity of demand for the product
except it produces
a. Changes in industry output will not affect the 646. The lowest point of real GDP at the end of a
price of resource A recession is known as
b. The rice of resource A is determined by market a. Recovery
supply and demand b. Recession
c. The marginal cost of resource A to firms in the c. Trough
industry is equal to the price of resource A d. Peak
d. Each firm will hire units of the resource until the 647. If a firm is hiring inputs under purely competitive
price of the factor equals its marginal revenue conditions, then any level of output will be produced
product with the least-cost combination of resources A and B
640. Short term fluctuations in real GDP are also called when
a. Business periods a. MP of A/price of A = MP of B/price of B
b. Business cycles b. MU of A/price of A = MU of B/price of B
c. Economic growth c. The price of A equals the price of B
d. Economic development d. MRP of A = MRP of B
641. Demand pull inflation may result from 648. The inflation rate shows
a. Lower budget deficits a. The average price level during a particular
b. Higher taxes period of time
c. Lower taxes b. The price level in a given year expressed in
d. Higher wage rates terms of a base year
642. Suppose that the consumer price index for c. The percentage rate per period that prices are
1990,1995 and 1999 are 100, 110 and 125, respectively. increasing
This implies that the general price level in 1999 is higher d. A measure of the change in real output from
than that of 1990 by one year to the next
a. 10 pesos 649. Unforeseen inflation usually hurts
b. 25 pesos a. Fixed income classes
c. 25 percent b. Risk taking speculators
d. 15 percent c. Profit seekers
643. The CPI is designed to measure the degree to d. Debtors
which 650. If the consumption is P60 billion when disposable
a. consumption patterns have changed with time income is P100 billion, the marginal propensity to
because of prices consume is
b. consumer prices have risen relative to wages a. 0.5
c. income is distributed among the poor and rich b. Cannot be determined from the information
over time given
c. 0.4
 d. 0.6
651. Suppose capital is readily substitutable for labor
and that the price of capital falls. We can conclude that
the
a. output effect will reduce the demand for labor
b. substitution effect will tend to reduce the
demand for labor
c. demand for labor will necessarily increase
d. demand for labor will necessarily decline
652. Inflation causes
a. A loss to fixed income earners
b. A decline in the purchasing power of money
c. A loss to lenders and a benefit to creditors
d. All of the above
653. If the marginal revenue product of labor is less
than the wage rate
a. Less labor should be employed
b. The firm is making profits
c. The firm is incurring losses
d. More labor should be employed
654. Which of the following is not a component of
aggregate demand
a. Savings
b. Investment
c. Government spending
d. Consumption
655. Which of the following is considered an
investment?
a. Dr. Bunan buys P10 million of stocks from Mr.
Ang.
b. Farmer A buys a second-hand tractor from
farmer B
c. Mang Andrew deposits P50,000 in his savings
account
d. Mrs. Bunan constructs a new condominium
worth 2 billion
656. The multiplier shows the magnitude by which the
_____________ changes in response to a one-peso
change in investment spending.
a. Inflation rate
b. Unemployment rate
c. Growth rate of output
d. Level of output
657. A deflationary gap can be eliminated by
a. Decreasing investment
b. Decreasing government spending
c. Decreasing autonomous consumption
d. Decreasing taxes
658.
The sum of all expenditures for final goods and services
and changes in inventory of final goods is equivalent to
a. Disposable income
b. All income paid out as wages and salaries
c. The total off all value added
d. The amount of money in circulation
659. Wage differentials occur for all of the following,
except
a. Homogeneous workers
b. Labor market imperfections
c. Noncompeting groups of workers
d. Equalizing differences to offset nonmonetary
differences in jobs
660. It is the slope of the savings function. This is
referred to as
a. Marginal propensity to save
b. Diminishing marginal leakages
c. Diminishing marginal savings
d. Marginal propensity to consume
661. )
Suppose you were given the data below on income (Y)
and consumption (C) expenditures in billion pesos
Y 0 100 200 300 400 500 600 700 800 900
C 30 120 210 300 390 480 570 660 750 840
What is the equilibrium income?
a. P300 billion
b. P400 billion
c. P250 billion
d. P200 billion
662. The point where the C + 1 line intersects the 45-
degree line is called the
a. Equilibrium income
b. Inflationary gap
c. Deflationary gap
d. Break even income
663. The _______ is the unemployment rate that exists
in normal times when there is neither a recession nor a
boom
a. Natural unemployment rate
b. Frictional unemployment rate
c. Structural unemployment rate
d. Cyclical unemployment rate
664. The Philips curve shows the relationship between
inflation and
a. The interest rate
b. The budget deficit
c. Unemployment
d. The wage rate
665. The following are conceptual weaknesses of GNP
as a measure of economic welfare except
a. It fails to indicate some production activities
corrected for ill effects of other production, like
pollution
b. It omits non-marketed goods and services
c. It measures only the monetary value of
production and not utility or welfare
 d. It gives no indication about the income
distribution
666. Marginal resource cost is
a. A firm's cost of hiring one group of inputs, such
as capital and labor
Determined by the marginal physical product schedule
for an input
b. The firm's demand curve for a productive
resource
c. The increase in a firm's total cost caused by
hiring one additional unit of an input
667. In a competitive market, a decrease in the demand
for a productive resource, ceteris paribus, will cause all
of the following except a/an
a. decrease in the number of units of the resource
that are employed
b. increase in the price of the resource
c. decrease in the total income earned by all units
of the resource
d. decrease in the price of the resource
668. The labor force participation rate is the ratio of
people in the work force to the
a. Sum of the employed plus unemployed
b. Working age population
c. Country's population less the physically
handicapped
d. Country's population
669. The bulk of Philippine government expenditures is
accounted for by
a. Personal services
b. Debt service
c. Capital outlay
d. Maintenance and other operating expenses
670. Suppose you were given the data below on income
(Y) and consumption (C) expenditures in billion pesos
Y 0 100 200 300 400 500 600 700 800 900
C 30 120 210 300 390 480 570 660 750 840
The savings function (S) is
a. S = -30 + .1Y
b. S = 0 + .1Y
c. Y = -30 + .1Y
d. Y = 30 + .25Y
671. Other things being the same, if the demand for
labor is inelastic
a. Increases in wage rates will result in smaller
payrolls
b. Decreases in wage rates will increase both
employment and worker incomes
c. Increases in wage rates will result in greater
payrolls
d. Decreases in wage rates will result in greater
payrolls
672. When intended saving (S) is greater than
investment I, then
a. GNP will tend to increase
b. GNP will tend to remain unchanged
c. GNP will fall
d. None of the above
673. The marginal cost of a productive resource is equal
to the price of the resource if a firm is
a. Able to influence the price of the product by
producing more or less of it
b. A price taker in the output market
c. Able to influence the price of the factor by
buying more or less of it
d. A price taker in the resource market
674. A competitive employer will hire inputs up to the
point where the
a. marginal product of the input reaches a
maximum
b. price of the input equals the marginal product
of the input
c. price of the input equals the marginal revenue
product of the input
d. price of the input equals price of the output
675. A negative inflation rate or declining prices is
known as
a. Disinflation
b. Reinflation
c. Deflation
d. Price shock
676. The individual firm which hires labor under
competitive conditions faces a labor supply curve which
a. Is perfectly elastic
b. Is of unit elasticity
c. Is perfectly inelastic
d. Slopes upward to the right
677. Which of the following is not true of price
discrimination?
a. It exists when price differences depend critically
on different buyers' evaluation of a product
b. Successful price discrimination implies that the
producer can separate customers into easily
identifiable groups
c. Successful price discrimination will provide the
firm with higher total revenue than a non-
discriminating monopolist
d. Price discrimination will generally result in a
lower level of output than would be the case
under a single-price monopoly
678. The decision to work or not to work can be
analyzed with the concept/s of the
a. substitution and income effects
b. backward-bending labor supply curve
c. Both of the above
 d. None of the above
679. The exact relationship between the marginal
propensity to consume (MPC) and the marginal
propensity to save (MPS) is
a. MPC = MPS
b. MPC - MPS = 1
c. MPC + MPC = 0
d. MPC + MPS = 1
680. A profit-maximizing firm should hire an input as
long as the
a. price of the input does not exceed the price of
the other inputs used in the firm's production
b. marginal revenue product of the input is at least
as much as the cost of hiring the input
c. marginal revenue product of the input is greater
than the marginal revenue production of other
inputs the firm is using
d. firm can increase its total revenue
681. In order to practice price discrimination, a firm
must meet each of the following conditions, except
a. The firm must be able to separate its customers
into two or more groups with different demand
elasticities for the product the firm produces
b. The firm's production schedule must face
economies of scale
c. Purchasers of the firm's product cannot resell it
d. The firm must have some degree of monopoly
power
682. Other things held constant, imperfect competition
in resource markets results in
a. Lower prices and higher output in product
markets for goods and services
b. Efficiency in the allocation of inputs
c. Less labor hired than if resource markets were
competitive
d. Maximization of society's net welfare
683. Economists prefer to use real GNP rather than
current GNP as a measure of aggregate output because
a. Current GNP always understates actual output
changes
b. Real GNP adjusts current GNP for inflation
c. Real GNP adjusts for the unequal distribution of
income
d. All of the above
684. Savings and investment are, respectively
a. An injection and a leakage
b. A leakage and an investment
c. Wealth and income
d. Income and wealth
685. An example of transfer payments is
a. Expenditures on rice
b. Pension of retired government agriculturists
c. Salaries of agribusiness executives
d. Wages and salaries of technicians working on
government farms
686. The economy complete with the government and
foreign sectors is in equilibrium when
a. Money demand = money supply
b. S + Imports + T = G + Exports – Imports
c. There is full employment of resources
d. S + T + Imports = I + G + Exports
687. __________ unemployment occurs as new workers
enter the labor force and must look for work, or as
workers change jobs for one reason or another and
need some time to find another job
a. Natural unemployment
b. Frictional unemployment
c. Cyclical unemployment
d. Structural unemployment
688. If all firms in an industry are price takers in the
market for resource A, then
a. More efficient firms will produce at levels
where the marginal revenue product of the last
unit of resource A is higher
b. The marginal product of the last unit of
resource A will be the same in all firms in the
industry
c. The price of resource A will increase if a single
firm increases the output
d. Less efficient firms will produce where the
marginal revenue product of the last unit of
resource A is higher
689. According to the real business cycle theory, shifts
in potential GDP are a primary cause of fluctuations in
a. Nominal GDP
b. Real GCP
c. Real GDP per capita
d. Changes in technology
690. A cost minimizing firm using two outputs, x and y,
will employ inputs so that
a. MPx/MPx = MPy/Py
b. MPx = MPy
c. Px/MPx = Py/MPy
d. Px = Py
691. Which of the following is not a component of GNP?
a. Investment
b. Exports less imports
c. Consumption expenditures
d. Intermediate sales
692. The larger the MPS
a. The greater the investment
b. The larger the multiplier
c. The larger the MPC
d. The smaller the multiplier
693. Suppose you were given the data below on income
(Y) and consumption (C) expenditures in billion pesos
Y 0 100 200 300 400 500 600 700 800 900 b. the same as the marginal resource cost
C 30 120 210 300 390 480 570 660 750 840 schedule
What is the value of S at the equilibrium level of c. the same as the marginal revenue product
income? schedule
a. 0 d. the same as the marginal productivity schedule
b. P30 billion 700. With everything else unchanged, an increase in
c. -P30 billion government spending without a corresponding increase
d. P60 billion in tax revenues will
694. Savings is the accumulation of _________ through a. Make it unlikely that elective officials will be
the postponement of _________ reelected
a. Income, consumption b. equilibrium income
b. Investment, consumption c. Cause the foreign exchange rate to go down
c. Wealth, consumption d. Increase the government budget deficit
d. Consumption, investment 701. An economic resource that is considered as a "free
695. The marginal revenue product of an input in a gift of nature"
competitive market decrease as a firm increases the a. Land ability
quantity of an input used because of the b. Capital
a. Law of diminishing marginal utility c. Labor
b. Homogeneity of the product d. Entrepreneurial
c. Free mobility of resources 702. Pricing three apples at P50.00 or two T-shirts for
d. Law of diminishing returns P180.00 is an example of
696. A labor union representative observed that if the a. Multiple unit pricing
union members' wages were increased by some b. Odd-centavo pricing
proportion, the workers would eventually suffer a c. Price lining
greater than proportional decline in unemployment. d. Price bundling
This statement would be best explained if 703. The price of a product is placed at P995.95. This is
a. Union labor can easily be replaced with capital an example of
b. The demand for the final product the workers a. Price bundling
produce is relatively inelastic b. Multiple unit pricing
c. The new wages are to take effect immediately c. Odd-centavo pricing
d. Union labor is an insignificant portion of the d. Price lining
total cost of production 704. Which is not true at market equilibrium?
697. If capital and labor are used in rigidly fixed a. Surplus equals shortage
proportions and the price of capital falls, it can be b. Quantity demanded is equal to quantity
concluded that supplied
a. labor demand will necessarily decline c. The price that consumers are willing to pay is
b. labor demand will tend to increase equal to the price that sellers are willing to
c. the substitution and output effect will work in accept
opposite directions so no judgment can be d. All of the above
made as to the effect on labor demand 705. The sales promotion technique most likely to hold
d. the elasticity of demand for both labor and customers over a period of time would be
capital will increase a. Coupons
698. When the net factor from abroad is deducted from b. Bonus packs
GNP, the remainder is c. Trading stamps
a. Net national product d. Pull premium
b. National income 706. It is a trade barrier by which foreign firms
c. Disposable income "voluntarily" limit the amount of their exports to a
d. Gross Domestic Product particular country
699. According to the marginal productivity theory, the a. Non-tariff barriers
labor demand for a competitive seller is b. Voluntary Export Restriction
a. independent of the value of the product being c. Import quota
produced d. Tariff
707. A grant of immunity to particular persons or c. Savings + consumption
corporations from a tax which they are obliged to pay d. Consumption + investment
a. Tax amnesty 716. Description of the number and nature of
b. Tax exemption participants in the market
c. Tax evasion a. Competitive market
d. Tax avoidance b. Trading center
708. Monopolistic competition might also be referred to c. Market structure
as d. association
a. Imperfect competition 717. Business cycle is inherent under
b. Perfect competition a. Barter economy
c. Pure competition b. Socialism
d. Market competition c. Market system
709. Tupperware company uses the pricing strategy d. Command economy
called 718. A downward movement along a given demand
a. Price lining curve is a result of
b. Odd-centavo pricing a. An increase in the price of the good
c. Prestige pricing b. An increase in the income of the consumers
d. Reference pricing c. A decrease in the income of consumers
710. Variation in price which is repetitive in nature d. A decrease in the price of the good
a. Seasonal 719. Consumer behavior can be understood if the
b. Annual following are considered except
c. Random a. Consumer's choices
d. Cyclical b. Producer's preferences
711. The surplus value is eliminated under what c. Budget constraints
economic system? d. Consumer's preferences
a. Socialism 720. A law that sets a fixed amount of imports. It
b. Communism specifies the maximum amount of commodity that may
c. Capitalism be imported in any period
d. Both a and b a. Voluntary Export Restriction
712. The theory of consumer sovereignty says that in a b. Non-tariff barriers
free market, economy will determine which goods and c. Import quota
services to produce d. Tariff
a. Producer 721. Setting the price of a product so low that the
b. Seller market is unattractive to competitors
c. Consumer a. Extinction pricing
d. Buyer b. Preemptive pricing
713. Which of the following issues is a normative c. Formula pricing
economics? d. Penetration pricing
a. The benefits from an increase in government 722. Subdividing markets into distinct subsets of
spending on education customers/buyers, where any subset may conceivably
b. The size of the increase in sales of recyclable be selected as a target market
materials if the government puts up collection a. Demographic segmentation
c. The increase in a firm's profit from its b. Geographic segmentation
introduction of a better mosquito killer c. Psychological segmentation
d. All of the above d. Market segmentation
714. The initial price of a product is called 723. The amount of goods and services that your wages
a. Fixed price can buy is called
b. Total price a. Free wage
c. List price b. Money wage
d. Marginal price c. Real wage
715. Disposable income is comprised of d. Salary
a. Savings + taxes 724. Because of scarcity, a choice must be made which
b. Consumption + Government expenditures in turn involves
 a. Priorities 733. Which of the following is in line with a tight fiscal
b. Decisions policy?
c. Exchange a. Low money supply growth
d. Trade off b. Lower government spending
725. Fiscal policy refers to government policies related c. Limits on imports
to d. Lower income taxes
a. Investments 734. The difference between total revenue and total
b. Wages and prices costs
c. Government expenditures and taxation a. Variable cost
d. Money supply, credit and interest rate b. Breakeven price
726. Which form of monopoly regulation is most c. Marginal revenue
advantageous for the consumer? d. Profit
a. Price control 735. An attribute that signals quality which involves the
b. Specific tax physical composition of the product such as flavor, color
c. Lump sum tax and sweetness in an orange drink
d. All of the above a. External cues
727. It is to test and decide the classes of products and b. Quality assurance
labeling them as to quality c. Standards
a. Standardization d. Internal cues
b. Grading 736. It is an economic system characterized by the
c. Processing public ownership of property resources and collective
d. Sorting determination of economic decisions through central
728. The cost incurred in selling the products economic planning
a. Distribution/Transportation cost a. Socialism
b. Advertising cost b. Capitalism
c. Packaging cost c. Communism
d. Marketing cost d. Fascism
729. An attribute that signals quality which are product- 737. A collective term referring to the use of taxation
related but not part of the physical product itself such and government spending to influence the level of
as brand name, price, warranty, product form and level income
of advertising a. Fiscal policy
a. Standards b. Monetary policy
b. Quality assurance c. Trade policy
c. External cues d. Credit policy
d. Internal cues 738. Which form of monopoly regulation is most
730. The forces influencing price determination advantageous for the consumer?
a. Demand and supply a. Per-unit tax
b. Demand b. Price control
c. Supply c. Lump-sum tax
d. Neither supply nor demand d. All of the above
731. In drawing a farmer's supply curve for cabbage, the 739. The use by the taxpayer of illegal or fraudulent
following factors are kept constant except for means to defeat or reduce the payment of tax
a. The supply of inputs a. Tax evasion
b. Environmental factors b. Tax transformation
c. Price of cabbage c. Tax exemption
d. Technology d. Tax avoidance
732. The analysis of how the individual consumer or 740. The sequence of firms and individuals comprise of
producer responds to changes in economic all the intermediates involved in the products/goods
environment and the title to them from the producer to the ultimate
a. Economic policy consumer
b. Macroeconomics a. Facilitative organizations
c. Economic Theory b. Processors and manufacturers
d. Microeconomics c. Merchant middlemen
 d. Marketing channel a. Retailers
741. The primary goal of promotion is to b. Wholesalers
a. Persuade c. Advertising agencies
b. Create awareness d. Distributors
c. Inform 750. It is a method of pricing the product by adding
d. Remind certain percentage to the cost in producing the product
742. A pencil case packed for sale with a scissor, a. Target pricing
ballpen, pencil, eraser and foot ruler valued at just P50. b. Price elasticity
The pricing strategy applied is c. Cost-oriented pricing
a. Captive pricing d. Mark-up pricing
b. Package pricing 751. Debtors and profit earners benefit from inflation.
c. Price lining This statement is
d. Skimming price a. False
743. Using a good or service which results in satisfaction b. True
of human wants c. Ambiguous
a. Utilization d. None of the above
b. Consumption 752. Cost of the self-owned, self-employed resources
c. Utility used by a firm in the production process
d. Distribution a. Explicit cost
744. Point where profit is zero b. Fixed cost
a. MR>MC c. Implicit cost
b. MC is constant d. Cash cost
c. MR = P 753. Movement along a given demand curve are caused
d. Breakeven by changes in
745. Means buying a quantity of a product and breaking a. Price
or dividing the bulk items into amounts desired by b. Tastes and preferences
customers c. Income
a. Processing d. Related goods
b. Sorting 754. Gross private investment includes
c. Grading a. Changes in inventories
d. Standardization b. All final purchases of machineries, equipment
746. The difference of marketing revenue and and tools
marketing cost c. All construction
a. Selling cost d. All of the above
b. Total sales 755. When two individuals enter into an agreement and
c. Product cost bind themselves to this agreement, they are enjoying
d. Marketing margins a. Freedom of contract
747. Monopsony is a term used in economics to b. Freedom of expression
describe a situation in which the following condition c. Freedom of fulfillment
applies d. Freedom of unity
a. One seller 756. A market for commodities which are difficult to
b. Few sellers standardize. It is most widely used where actual
c. Many sellers inspection of the product is desirable to determine its
d. One buyer quality
748. The job of collecting, interpreting and a. Auction market
disseminating information that is necessary to the b. Shopping malls
smooth operating and marketing process c. Supermarket
a. Demand creation d. Black market
b. Market research 757. It is the process by which buyers and sellers arrive
c. Marketing intelligence function at a specific price for a given lot of produce in a given
d. Risk-bearing function location
749. Sales promotion is conducted mainly by producers a. Price discovery
and b. Price exploration
 c. Price determination 766. This act is known as the "High Value Crops
d. Marketing Development Act of 1995"
758. It refers to how much of a good or service a buyer a. RA 9800
is willing to purchase at a single specified price, in a b. RA 9700
given market, at a given time, ceteris paribus c. RA 8900
a. Quantity supplied d. RA 7900
b. Demand 767. Pricing a less desirable product with a more
c. Supply desirable product
d. Quantity demand a. Extinction pricing
759. These are taxes imposed on goods exported from b. Competitive pricing
or imported into a country c. Preemptive pricing
a. Income taxes d. Tie-in pricing
b. Energy taxes 768. Refers to the know-hows and the physical means
c. Value added taxes of transforming resources into want satisfying form
d. Customs Duties a. Techniques of production
760. Form of business organization created by operation b. Production
of law with not less than 5 and not more than 15 c. Resources
members d. Depreciation
a. Corporation 769. Appraisal of how much the economic resources of
b. Sole proprietorship the industry's market behavior forms the best possible
c. Partnership contribution it can make to achieve relevant socio-
d. Cooperative economic goals
761. Before, a compact disc was valued at P200; now it a. Marketing system
is P50. This is an example of b. Market performance
a. F.O.B origin pricing c. Market conduct
b. Price lining d. Facilitative organization
c. Captive pricing 770. The difference between the receipts of a firm and
d. Skimming price its expenses. The costs that are considered are those
762. The fastest growing advertising medium is for which payment is actually made. It can be
a. Magazine misleading because it may omit some very important
b. Television costs of production.
c. Radio a. Accounting profit
d. Direct mail b. Economic profit
763. Inflation brought about by considerable market c. Net profit
power is referred to as d. Gross profit
a. Demand pull inflation 771. A schedule which shows the various amounts
b. Structural inflation household plans to consume at various levels of income
c. Cost push inflation a. Demand schedule
d. None of the above b. Supply schedule
764. It refers to how much of a good or service a seller c. Savings schedule
is willing to offer at a single, specified price, in a given d. Consumption level
market at a given time, ceteris paribus 772. Type of pricing usually used by wholesalers. A
a. Quantity demand pricing agreement is negotiated with the buyer.
b. Quantity supplied a. Extinction pricing
c. Supply b. Preemptive pricing
d. Demand c. Formula pricing
765. Pricing a product on the basis of its variable costs d. Penetration pricing
in order to force firms in weak financial positions to 773. Marketing function that involves the seeking out of
discontinue their production the sources of supply, assembling of products and the
a. Preemptive pricing activities associated with purchase
b. Extinction pricing a. Exchange function
c. Penetration pricing b. Utility
d. Formula pricing c. Wholesaling
 d. Selling function Borrowing
774. It is an economic system in which all major d
decisions concerning the level of resource use, the Savings
composition and distribution of output and the
organization of production are determined by the price Question 79 (1 point)
system A vertical supply curve can be associated with
a. Fascism a
b. Communism Perfectly elastic supply
c. Capitalism b
d. Socialism Perfectly inelastic supply
c
Question 75 (1 point) Short run supply curve
The tax on the net income or the entire income realized d
in one taxable year Long run supply curve
a
Revenue tax Question 80 (1 point)
b A marketing service that influences the buyers and/or
Donors tax consumeres to buy. The objective is to inform
c consumers what is available for purchase, especially if
Value-added tax the product is new in the market
d a
Income tax Advertising
b
Question 76 (1 point) Branching
All productive activities are based on c
a Market intelligence
Marketing d
b Market research
Consumption
c Question 81 (1 point)
Distribution A decrease in demand with supply constant will lead to
d a
Exchange A decrease in the price of the product and an increase
in equilibrium quantity
Question 77 (1 point) b
Also known as the law of diminishing marginal A decrease in both price of the product and the
productivity equilibrium quantity
a c
Law of Diminishing Returns An equilibrium in both price of the product and the
b equilibrium quantity
Law of Diminishing Utility d
c An increase in the price of the product and a decrease
Law of Diminishing Demand in the equilibrium quantity
d
Law of Diminishing Supply Question 82 (1 point)
A government-established price floor will result in
Question 78 (1 point) excess supply if
The best way to avoid buying on installment is by a
a The floor price is equal to the equilibrium price
Credit buying b
b The floor price is below the equilibrium price
withholding consumption c
c The floor price is above the equilibrium price
 d d
The quantity demanded is greater than the quantity Price discovery
supplied
Question 87 (1 point)
Question 83 (1 point) RA 6938 is otherwise known as the
Which of the following does not belong to the group? a
a Taxation Code of the Philippines
Storage function b
b Agriculture Code of the Philippines
Barter c
c Cooperative Code of the Philippines
Donation d
d Forestry Code of the Philippines
Transportation function
Question 88 (1 point)
Question 84 (1 point) They are the resource users who receive receipts or
The difference between all revenues or receipts of the revenues as payment for the production and sales of
firm and the value of all inputs used by the firm, goods and services
whether paid or not. For those productive services for a
which cash payment is not made, the economist Business firms
estimates their value using the concept of opportunity b
cost. Government
a c
Accounting profit Households
b d
Net profit Rest of the world
c
Gross profit Question 89 (1 point)
d The most common cause of depreciation of land value is
Economic profit a
Erosion
Question 85 (1 point) b
Which of the following is not one of the five ways of Acid rain
which prices for farm products are "discovered"? c
a Pollution
Individual negotiations d
b Depletion of fertility
Collective bargaining
c Question 90 (1 point)
Organized markets It formalizes the relationship between price and
d quantity consumers are willing to buy at those prices
Retailing a
Demand
Question 86 (1 point) b
Refers to the process by which the broad forces of Law of Demand
supply and demand establish a general market clearing c
or equilibrium price Supply
a d
Price determination Law of supply
b
Price exploration Question 91 (1 point)
c It describes how the capitalistic economy works given
Marketing the interaction between the households, who are the
owners of resources and the firms, who are the users of a
resources Shortage
a b
Transformation curve Producer surplus
b c
Production possibility frontier Consumer surplus
c d
Circular flow model Surplus
d
None of the above Question 96 (1 point)
It is the year from which the quantities of a basket of
Question 92 (1 point) goods that is used for calculating the price index is
All activities that relate to the container or wrapper of based
the product a
a Fiscal year
Augmented product b
b Base year
Packaging c
c Current
Brand d
d Production
Product mix
Question 97 (1 point)
Question 93 (1 point) If the price of good X is negatively related with the
The extra product or ouput added for every one extra demand for good Y, then,
unit of the factor added, while other factors are held a
constant Goods X and Y are independent
a b
Total product Goods X and Y are complements
b c
Average product Goods X and Y are substitutes
c d
Constant product None of the above
d
Marginal product Question 98 (1 point)
The price of the product with different sizes is: Small =
Question 94 (1 point) P3.50, Medium = P4.00 and Large = P4.50. This is a
Which statement is different from the other form of
statements? a
a Skimming price
There is private ownership of property b
b Captive pricing
There is economic freedom c
c Price lining
Goods and services are distributed through the market d
system F.O.B. origin pricing
d
Production decisions are made by central planning Question 99 (1 point)
board The price of the camera is P1,000 while a roll of a 36-
shot film is P105. This is a form of
Question 95 (1 point) a
It is said to exist when the prevailing price of commodity Skimming price
is above the equilibrium price b
Captive pricing
c
Price lining
d
F.O.B. pricing

Question 100 (1 point)

Capital is usually accumulated frozen
a
Interest
b
Rent
c
Profit
d
Savings