Name: Rigor, Nicholas Christian L.

Date: November 26, 2022

Section: BSBA-MM1 Rating: _________

Chapter 1 INTRODUCTION TO MICROECONOMICS

Exercise No. 1.1

MULTIPLE CHOICE QUESTIONS

These questions are organized by topic from the chapter outline. Choose the best answer from the
options available.

A. Introduction

1.Economics is concerned primarily with:

a. money
b. determining corporate profits and losses.
c. The allocation of scarce resources.
d. Balancing your checkbook.
e. All of the above.

Answer: c.

2. The fundamental questions of economic organization are:

a. closely related to the concept of scarcity.

b. Not nearly as important today as they were at the dawn of civilization.
c. What, how, why, and for whom
d. Land, labor, and capital.
e. All of the above.

Answer: a.

3. The economic problem of what goods to produce:

a. may be a problem for any individual firm seeking to make a profit but is not in any sense a
problem for society as a whole.
b. Can be illustrated as the problem of choosing a point on the production-possibility curve.
c. Arises only when the stock of productive resources is very small.
d. Arises only when all productive inputs are so specialized that each can be used only in the
production of one good and no other.
e. None of the above.

Answer: e.

4. Capital is:

a. the same as money.

b. The headquarters of economic planning.
 c. Both an input and an output.
d. All of the above.
e. None of the above.

Answer: b.

5. Land, labor, and capital are:

a. available only in finite amounts.

b. Used to produce outputs.
c. The primary factors of production.
d. Combined with technology in the production process.
e. All of the above.

Answer: c.

6. Scarcity is:

a. allocation of scarce resources.

b. Fundamental conflict between unlimited human wants with limited resources
c. Both an input and an output.
d. All of the above.
e. None of the above.

Answer: b.

7. Entrepreneur is:

a. Refers to natural resources which are usable in the productive process

b. Used to produce outputs.
c. The primary factors of production.
d. Persons who sets up a firm by combining and organizing properly the basic factors of production.
e. All of the above.

Answer: d.

8. Economic system is:

a. refers to a quantity to each good that will have to compose the total output.
b. market wherein society should concentrate to sell their products
c. the institutions and mechanism used to determine what and how to produce and who will receive
the goods and services.
d. all of the above

Answer: c.

9. microeconomics

a. studies the aggregate level of economic activity, such as the total level of output, level of national
income.
b. Fundamental conflict between unlimited human wants with limited resources
c. Both an input and an output.
d. studies of economic behavior of individual decision-making units such as consumers, resource
owners of business firm.
e. all of the above
 Answer: d.

10. what to produce

a. studies the aggregate level of economic activity, such as the total level of output, level of national
income.
b. Fundamental conflict between unlimited human wants with limited resources
c. is a question of the types of goods society desires.
d. studies of economic behavior of individual decision-making units such as consumers, resource
owners of business firm.
e. all of the above

Answer: c.

11. Land

a. allocation of scarce resources.

b. refers to natural resources which are usable in the productive process
c. Both an input and an output.
d. All of the above.
e. None of the above.

Answer: b.

12. Economics

a. proper allocation of scarce resources

b. Used to produce outputs.
c. The primary factors of production.
d. Persons who set up a firm by combining and organizing properly the basic factors of production.
e. All of the above.

Answer: a.

13. How to produce:

a. refers to a quantity to each good that will have to compose the total output.
b. market wherein society should concentrate to sell their products
c. the institutions and mechanism used to determine what and how to produce and who will receive
the goods and services.
d. a question in the techniques of production and the manner of combining resources to come up
with the desire output.

Answer: d.

14. macroeconomics

a. studies the aggregate level of economic factitively, such as the total level of output, level of
national income.
b. Fundamental conflict between unlimited human wants with limited resources
c. Both an input and an output.
d. studies of economic behavior of individual decision-making units such as consumers, resource
owners of business firm.
e. all of the above

Answer: a.
 Exercise No. 1.2

MATCHING TYPE (Write the letter beside the number)

a. Socialism (I.) 1. Economic system that allows

complete ownership, management and
operation of all the means of production
and distribution
b. For whom to produce (k.) 2. question on the techniques of
production and the manner of combining
resources to come up with desire
output.
c. Capitalism (h.) 3. refers to all-natural resources
which are usable in the productive
process
d. Microeconomics (l.) 4. a system of relationship among
the members of the upper class of
Medieval Europe whereby a person is
given a piece of land in exchange for
military and political services rendered
e. Caciquism (b.) 5. refers to the market wherein
society should concentrate to sell their
products.
f. What to produce (o.) 6. derived from the latin word
“fascis”, or bundle of rods to power.
g. Entrepreneur (c.) 7. economic system where the
control of enterprise is in the hands of
individuals and the private sector.
h. Land (a.) 8. is the system of public ownership
and control of small-scale industries are
left to private to individuals.
i. Communism (d.) 9. studies of economic behavior or
individual decision-making units such as
consumers, resource owners of
business firms.
j. Macroeconomics (n.) 10. is a social science which is
concerned the proper allocation of
scarce resources to satisfy the
unlimited human needs and wants.
k. How to produce (j.) 11. studies the aggregate level of
economic activity, such as the total
level of the output, the level of national
income, the total level of employment
and the general price level for the
economy viewed as a whole.
l. Feudalism (m.) 12. Refers to all man-made aids to
production.
m. Capital (f.) 13. question of the types of goods
society desires
n. Economics (e.) 14. a system of landlordism in the
Philippines during the colonial period of
the Spaniards
 o. Fascism (g.) 15. Refers to a person who sets up
a firm by combining and organizing
properly the 3 basic factors of
production.

Exercise No. 1.3

IDENTIFICATION (Put the economic system on each given Number)

Choices
a. Capitalism d. Fascism
b. Socialism e. Caciquism
c. Communism f. Feudalism
g. Mercantilism

Capitalism 1. Stiff competition exists among companies producing the same product
of different brands.
Feudalism 2. Must render Military services at the time when it is needed.
Fascism 3. The rule of totalitarian or dictatorship
Mercantilism 4. Consumption of imported luxury goods are discouraged for it will bring
out the country’s precious metal.
Communism 5. Everyone is considered equal; no one enjoys privileges based on the
status in society.
Capitalism 6. Freedom to enter and leave any business venture. This freedom is
governed by the laws pertaining to business like factory laws, food and drug laws
and other public service laws.
Communism 7. The principle “from each according to his ability, to each according to
his needs” is applied.
Caciquism 8. Tenant-servant system – the tenant enjoyed free board and lodging in
the sense that he was given a small house and lot near the vast land known as
hacienda that he will cultivate.
Fascism 9. Complete control and management by the government of all the
political, economic, social, cultural and religious affairs of the nation.
Capitalism 10. Profit Motive is the core in the sense that it is main reasons for the
use of properties in entering an industry where the producers compete for profit.
Socialism 11. The major means of production are owned and controlled by the
government while small scale industries are left to the private sectors but still
under the control of the government.
Communism 12. All property is owned by the state.
Feudalism 13. The Lord and the vassals were interlocked in the web of mutual rights
and obligations in a well-protected castle.
Caciquism 14. Cleaning system- this system applies to “virgin lands” that require some
clearing. During the clearing process, no rents are applied to the cacique
Fascism 15. Any violation to the rules of the government may result to punishment,
imprisonment or death of the violator.
Communism 16. There is a single party that governs the state.
Socialism 17. Economic decision is planned by the central planning body
Capitalism 18. Competition – since anybody can enter into business, more people will
be producing the same product of different brands. Due to the number of
producers in an industry, competition exist.
Fascism 19. Strike and organizing trade union are not allowed by the government
Socialism 20. Provision of the opportunities for the satisfaction of the needs and wants
of the people.
Communism 21. There is the use of force
Feudalism 22. Financial obligation at the time when it is needed by the Lord like
marriage of the Lord’s daughter, part of the ransom’s money when the lord was
kidnapped, or anytime the manor needs some financial contributions.
Fascism 23. Government fixed the wages, working hours and the production goals of
the corporation.
Capitalism 24. It is the right to acquire, use and dispose anything of value. The
exercise of such right is within the implementing laws of the government.

Socialism 25. Equal opportunity and benefits for all member

Exercise No. 1.4

Review Question

1. What is the differentiation between Microeconomics and Macroeconomics?

- Macroeconomics studies the aggregate level of economic activity, such as the
total level of output, the level of national income, the total level of employment,
and the general price level for the economy viewed as a whole. It deals with
the total private expenditure, total investment, total government expenditures,
and total imports and exports of goods and services. On the other hand,
Microeconomics studies the economic behavior of individual decision-making
units such as consumers and resource owners of business firms. It deals with
how an individual consumer spends his income to maximize satisfaction, how a
business firm combines resources or factors of production to maximize profits
and minimize cost, and how the price of each commodity and each type of
resource is determined by demand and supply.

2. The importance of Economics to the society, government and producers of goods

and services.
- Because it lets everyone make an economic decision every day since it is a
way of thinking and may also be viewed as a collection of concepts
and perspectives on some of the problems society faces. This is also a social
science that is taught to most students around the world, some of whom
become successful entrepreneurs, and is concerned with the proper allocation
of scarce resources to satisfy unlimited human needs and wants.

3. Why do we consider entrepreneur as important economic resources?

- Because he or she properly organizes and combines the 3 basic factors of
production (land, labor, and capital) to supply goods and services that he thinks
society wants or needs. An entrepreneur hopes to make a normal profit, which
is the amount that is left behind after all allocations to other economic
resources have been made.
Chapter 2 INTRODUCTION TO MICROECONOMICS

Exercise No. 2.1

Identification

Demand 1. it implies willingness and ability to sacrifice something, money

or other commodities in order to obtain a specific good or service.

Price of Substitute Goods 2. factor of demand that buyers choose among substitutes guided
mainly by price.

Income 3. a very important factor of demand that allows a person to buy

more & different kinds of goods.

Price of Complementary Goods 4. factor of demand that buyers will increase their purchase of
certain goods when their compliments fall in price.

Future Expectations 5. factor of demand that buyers may consider the following before
they make a major purchase.

Demand Schedule 6. it is a table that shows the quantity or good or services that is
demanded at each different price level during some specified period of time.

Utility 7. factor of demand that for any good at any time people will depend
on the number of units of that good that already own.

Supply 8. it is the behavior of suppliers in terms of the quantity of a

commodity that they are willing to sell when confronted with different prices for
that commodity during some specified time period.

Technology 9. factor of supply that make possible in the production of goods &
services at lower costs.

Price of Goods 10. factor of supply that goods maybe substitute of a complement of a
product.

Subsidies 11. factor of supply that is added in the components of cost of

production.

Market Equilibrium 12. the quantity supplied and quantity demanded are equal.

Cost of Labor 13. one of the important in cost of production.

Market 14. it pays an important role in determining what will be produced,

how production will occur, & who does the production.

Availability of Resources 15. factor of supply that the supply of goods in the market depends
on the availability of resources.
 Exercise No. 2.2

Multiple Choice: Underline the correct answer

1. it exists when at a given price the quantity supplied is greater than the quantity demanded:
a. shortage c. market
b. surplus d. equilibrium

2. it occurs when a given price quantity supplied is lesser than quantity demanded

a. shortage c. market
b. surplus d. equilibrium

3. market is said to be ________ when the quantity supplied & the quantity demanded of a
commodity are equal
a. shortage c. market
b. surplus d. equilibrium

4. it refers to as the arena or medium in w/c buyer & seller interact or meet
a. shortage c. market
b. surplus d. equilibrium

5. factor of supply that are given to firms by government to help them maintain their current of
desired output
a. weather c. taxes
b. technology d. subsidies

6. factor of supply that producers consider stiff competition as challenge to capture the market
a. technology c. price of goods
b. number of producers d. taxes

7. it is a table showing the quantity of any given product that producers are willing & able to offer
for sale at each possible price during some specified time period
a. supply schedule c. demand schedule
b. supply curve d. demand curve

8. a change occurs when a factor underlying supply changes their causing a shift of the entire
curve
a. supply schedule c. demand schedule
b. supply curve d. demand curve

9. it is a table that shows the quantity of good or service that is demanded at each different price
level during some specified period of time
a. supply schedule c. demand schedule
b. supply curve d. demand curve

10. it is derived by plotting the points from the demand schedule & joining them
a. supply schedule c. demand schedule
b. supply curve d. demand curve
 Exercise No. 2.3

True or False

Encircle T if the statement is true, F if the statement is False

T F 1. Demand is purchasing behavior of behavior when they are

confronted with different prices for a specific goods or services.

T F 2. Demand schedule is a drawing that represent the demand curve.

T F 3. Law of demand states that as price increases, quantity demand

increase. As price decrease, quantity demand decrease.

T F 4. Supply is the behavior of consumer who are willing to supply the

market.

T F 5. Law of supply states that as price of the `quantity decrease,

suppliers tend to supply more product.

T F 6. Supply schedule is a table showing the quantity of any given

product that producers are willing and able to offer for sale.

T F 7. Market equilibrium means the quantity supplied and the quantity

demanded of a commodity are equal.

T F 8. Shortage occurs when a given quantity supplied is less than

quantity demanded.

T F 9. Surpluses exist when at a given price, the quantity supplied is

greater than the quantity demanded

T F 10. Market is where consumers and producers meet.

 Exercise No. 2.4

Rewrite the definition of demand in your own words.

= In my opinion, "demand" is a phrase for a request that a person has a right to

expect to happen in a scenario or with an object that he or she believes may be useful
in the job. Demands can be good or bad, easy or difficult to fulfill, or either cause a
situation that can have a positive or negative effect on not only the situation a person is
involved with, but also a person's sanity, depending on how good or bad a situation is
given to him or her by the person requesting the jobs at his or her own rights. This term
is always present in every job not only in the Philippines, but around the whole world
and every high-ranking individual uses this right to show what he or she really needs
and what the lower-ranking individuals needed to please or impress him or her.
 Exercise No. 2.5

Label the axes, draw a graph, and plot the demand schedule.

Demand schedule form product X

Price per quantity Quantity demanded

1.25 0
1.00 1
.75 2
.50 3
.25 4

1.50

1.25

1.00

0.75

0.50

0.25

1 2 3 4
 Exercise No. 2.6

Rewrite the definition of supply in your own word

= In my own words, the term supply means the resources that are really
important for a person or a party and the needs to build or industrialize in the economy
of a country or to what every society needs. Supplies are really needed by almost every
individual on the whole planet because this is what keeps all of us alive and entertained
by companies that have big names that have spread throughout the world and by our
parents who always give us the food, shelter, and clothes which were one of the basic
but important objects a human need for a healthy lifestyle. This term is common and
present through every individual on Earth that it has become a norm throughout society
itself.
 Exercise No. 2.7

Label the axes, draw a graph, and plot the supply schedule.

Supply schedule form product X

Price per quantity Quantity Supplied

1.25 1,000
1.00 850
.75 700
.50 625
.25 450

1.25

1.00

0.75

0.50

0.25

450 625 700 850 1,000