APPLIED ECONOMICS REVIEWER - QUARTER 2
1. What kind of business form BEST described by these
statements?
I am the only owner of my business.
I take all the risks of doing business.
I keep all the profits.
A. Proprietorship B. Corporation
C. Partnership D. Cooperative
2. All of the following are claimed advantages of joint
ventures except:
A.The costs of a new project can be split between the
companies involved.
B.Manufacturing costs will, be divided between the firms in
the venture
C.Joint ventures between firms in different countries can
create new market opportunities
D.Management of the joint venture will never lead to
disagreement.
3. One of the claimed advantages of sole proprietorship
business is that:
A. Owners have limited liability
B.Shares can be sold to raise capital.
C.Decisions and responsibilities can be shared.
D.The owner has independence
4. One of the advantages of partnership form of business
organization is that:
A. All partners always have limited liability.
B.Shares can be sold on the Stock Exchange
C. The business survives the death of the partners.
D.The business has access to more capital than a sole
proprietorship.
5. In a corporation, owners share profit, but liability is
limited to -
A.investment
B.distribution
C.theft
D.production
6. Jack and Jill are partners in travel and tours. Jack is a
limited partner and Jill is general partner. Jack invested
Php100,000 of his own money and Jill also invested
Php100,000. The business previously took out a loan of
Php300,000 that needs to be repaid which a lawsuit filed
by a creditor. Who will be liable for the full payment of the
loan?
A.Jack will only pay Php100,000 and Jill will pay
Php100,000 and its personal asset
B.Jill will only pay Php100,000 and Jack will pay
Php100,000 and its personal asset
C.Jack and Jill will only pay Php100,000 each
D. Only Jill will pay the Php300,000
7. A form of business organization that is authorized to act
as a legal entity regardless of the number of owners.
A. Proprietorship
B.Corporation
C.Partnership
D.Cooperative
JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
8. Jerry and John are partners in a real estate investment
group. Jerry invests Php500,000 of his own money to
acquire properties. John handles the real estate
transactions. John is a _________
A.General partnership
B.Limited partnership
C. sole proprietorship
D.Foreign corporation
9. Febbie has been asked to join a new partnership that is
opening several trucking services. She does not want to
be liable for the firm’s debts if the project should fail. She
could still participate as a _________
A. working partner
B. silent partner
C.limited partner
D.general partner
10. _________ is a legal term for being held accountable.
A.Assets
B.Liability
C.Bankruptcy
D.Claim
11. What is the advantage of corporation?
A.Minimal government regulation
B.Limited liability
C.Short life span
D.Has one owner
12. Ben Ruiz has invested Php400,000 in a real estate
corporation. The corporation does not do well and must
declare bankruptcy. What amount does Ben Ruiz stand to
lose?
A. Up to his total investment of Php400,000.
B. Zero.
C.The Php400,000 plus any personal assets the creditors
demand.
D.Php200,000.
13. How is a general partnership organized?
A.Every partner shared equally in both responsibility
and liability
B.The doctors, lawyers, or accountants who form a
general partnership hire others to run the partnership.
C.No partner is responsible for debts of the partnership
beyond his or her investment.
D.Only one partner is responsible for the debts of the
partnership
14. Which of the following statements about cooperative
business organizations is true?
A.All cooperatives are only concerned with retailing.
B.Profits are shared equally amongst members.
C.They are owned by shareholders.
D.Workers have no say in decision-making
APPLIED ECONOMICS REVIEWER - QUARTER 2 JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
15. Jerry and John are partners in a real estate investment 21. Harry has recently been appointed Marketing Manager
group. Jerry invests Php500,000 of his own money to for a fashion company. He needs to know whether or not
acquire properties. John handles the real estate the company's products have a sustainable advantage in
transactions. John makes some bad deals and now the the marketplace. Which factors does he need to analyze
group owes Php800,000 in delinquent mortgage payments. the industry?
Jerry can be held personally liable for: A. environment information
A. None of It B. competitor information
B.Up to Php500,000 C. regulatory information
C.Up to half, or Php400,000 D. industry as to size
D.The full Php800,000
22. Which of these non geographical factor influencing the
16. Cheng has a great idea for a business but has limited location of industries?
financial assets. She wants to retain control over the A. labour supply
management of the company, but she needs someone to B. water supply
provide additional financing. Her friend Tom has some C. insurance
money to invest and likes Cheng’s idea. He would like to D.literacy rate
share in any profits, but he doesn’t have the time or
interest in managing the company and is nervous about 23. One of the factors to consider in analyzing industry that
the liability involved in running a business. A includes consumer demographic such household size,
________________ would probably match the needs of family status etc. and psychographics such as lifestyle
both Cheng and Tom. information, tastes etc.?
A. General partnership A.buyers
B. Limited partnership B.geographic area
C. sole proprietorship C.product
D.Foreign corporation D.industry as to size

17. What type of business organization do not pay income 24. A factor that identify and communicate the benefits of
tax. Rather, the partners are taxed on their shares of your business offering to your target market.
income? A.Management trends
A.Cooperative B.Trends in sales
B.Partnership C.Regulatory environment
C.Proprietorship D.Marketing strategy
D.Corporation
25. Which factor is an example of employee programs,
18. One of the disadvantages of a sole proprietorship software systems, sales and distribution capabilities, and
business is that: marketing programs?
A.Capital is limited to the owner’s savings and bank A. Current operational trends
loans. B. Factors that affect growth of the industry
B.Decisions take too long to make C. Regulatory environment
C.As they are government-owned there is no profit motive. D. Marketing strategy
D.The owners may disagree
26. Which factor is an example of migration of population
19. What type of business organization faces double from rural to urban areas, customer loyalty, and
taxation? accessibility of location?
A.Proprietorship A. Current operational trends
B.Corporation B. Factors that affect growth of the industry
C.Partnership C. Regulatory environment
D.Cooperative D. Marketing strategy

20. Mr. Chan was planning to start a restaurant business. 27. This is to determine the leading businesses in the
He is looking for areas where his product is in high industry
demand or where his competition is fairly low. Which A.Factors that affect growth of the industry
factors does it referred to? B.Regulatory environment
A.Buyer C.Marketing strategy
B.Geographic area D.Company information
C.Product
D.Industry as to size 28. Jinky works for the local Department Store as a
cashier. Where does transaction takes place in circular
flow model?
A.Product market B.Factor market
C.Factors of production D.Firm
APPLIED ECONOMICS REVIEWER - QUARTER 2 JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
38. If the total injection exceeds total leakage, what will
29. Which of the following is NOT a leakage from the happen to the economy?
circular flow of income and expenditure? A.The whole economy will shrink, GDP will increase.
A.Government purchase B. The whole economy will expand, GDP will increase.
B.Imports C. The whole economy will shrink, GDP will decrease.
C.Taxes D.The whole economy will expand, GDP will decrease.
D.Savings
39. The flow of income will increase if:
30. GDP is a measure of a country's _________. A.Total injection exceed total leakage
A. wealth B.Total leakage plus total injection equals zero
B. money C.Total leakage exceed total injections
C. economic transaction D.Total leakage and total injections correspond
D. physical output
40. Shirley goes to a movie at Robinsons Cinema on
31. Which sector of the circular flow shows us that the Tuesday. Where does transaction takes place in circular
savings of households provide the source of investment flow model?
funds for firms. A. Product market B. Factor market
A. Households B. Firm C. Factors of production D. Firm
C. Financial sector D.Government
41. What would happen if business firms decided to
32. It is a visual model of the economy that shows how produce less?
money and output flows through the economy. A. It would lead to increase in household spending and
A. Economic flow cause a decrease in GDP.
B. Economy B. It would lead to increase in household spending and
C. Circular flow of economic activity cause an increase in GDP.
D. Circular flow C. It would lead to reduction in household spending
and cause a decrease in GDP.
33. Lucio retired and received 8,000 per month from his D. It would lead to reduction in household spending and
government social security benefits. What would we call cause an increase in GDP.
this type of payment in the circular flow model?
A. Profit B. Revenue 42. It is the outflow of money in the economy.
C. Income D. Transfer payment A. Injection B. imports
C. Leakage D. Savings
34. Which of the following is not an injection into the
circular flow of economy? 43. Which goods undergone some processing but need to
A. Spending by firms on investment go through additional processing before they can be used
B. Spending on exports by the consumer?
C. Spending on imports A. Raw materials B. Final goods
D.Spending by government on public goods and services C. Intermediate goods D. Consumer goods

35. When households and firms borrow in financial 44. Which sector that reaps the fruits of natural resources
markets to buy investment goods, such as and factories, like soil, water and forests?
what does it demonstrate in circular flow model? A. Agriculture, Fishery and Forestry sector
A. Injection B. Imports B. Industrial sector
C. Leakage D. Savings C. Service sector
D. Manufacturing sector
36. Globe Telecom received 1.5 million from the sales of
goods and services last year and had 1 million in costs. 45. Which stage is when Total Product decreases and as a
The 1.5 million is what type of payment in the circular flow result Marginal Product is negative?
model? A. Stage of diminishing returns
A. Profit B. Revenue B. Stage of increasing returns
C. Income D. Transfer payment C. Stage of marginal return
D. Stage of negative returns
37. Firms produce goods and services using inputs, such
as labor, land, and capital (buildings and machines). What 46. What law states that adding an additional factor of
do we call these inputs? production results in decrease of output?
A. Factors of production A. Law of Diminishing Marginal Utility
B. Goods and services B. Law of Diminishing Marginal Returns
C. Factor market C. Law of Diminishing Total Utility
D. Firm D. Law of Diminishing Consumer Utility
APPLIED ECONOMICS REVIEWER - QUARTER 2 JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
47. As more of a good is consumed, 55. Which of the following is NOT an assumption of
A. the marginal utility from the good falls and the total marginal utility theory?
utility rises. A. People derive utility from their consumption.
B. both the marginal utility and total utility from the good B. More consumption yields more total utility.
rise. C. Utility can be measured, and the units of utility are
C. the marginal utility from the good rises and the total precisely defined
utility falls. D. Marginal utility diminishes with more consumption.
D. both the marginal utility and total utility from the good
fall. 56. Which sector that produces the intangibles supporting
and complementing production in the other sectors as well
48. All are examples of intermediate goods except one. as among its own industries?
A. Salt B. Sugar A. Agriculture, Fishery and Forestry sector
C. Steel D. Minerals B. Service sector
C. Industrial sector
49. Which sector that processes raw materials from D. Manufacturing sector
agriculture, fishery, and forestry into intermediate products
that are further processed into final products? 57. These are extracted from their sources and do not
A. Agriculture, Fishery and Forestry sector undergo any process of production?
B. Service sector A. Raw materials B. Final goods
C. Industrial sector C. Intermediate goods D. Consumer goods
D.Manufacturing sector
58. The role of this sector is to contribute leakage by way
50. Which law states that satisfaction of consumers keeps of savings and inject money through investment and
on declining as more units of a commodity are consumed? loans?
A.Law of Diminishing Consumer Utility A. Household sector B. Business sector
B. Law of Diminishing Total Utility C. Government sector D. Financial sector
C. Law of Diminishing Marginal Utility
D.Law of Diminishing Marginal Returns 59. The source of factors of production who earn income
by providing factor services to the firm sector?
51. It magnifies the flows of resources and payment in A. Household sector B. Business sector
exchange between households and the producers in the C. Government sector D. Financial sector
circular flow diagram?
A. Resource-Production Payment Flow 60. A sector of economy that provide goods and services
B. Intra-Production Payment Flow and earn revenue?
C. Intra-Resource Payment Flow A. Household sector B. Business sector
D. Production Payment Flow C. Government sector D. Financial sector

52. Which sector that processes raw materials from 61. The role of this sector is to purchase goods and
agriculture, fishery, and forestry into intermediate products services, collects revenues through taxes and other fees
which are further processed into final products? and transfer it to households.
A.Agriculture, Fishery and Forestry sector A. Household sector B. Business sector
B.Industrial sector C. Government sector D. Financial sector
C.Service sector
D.Manufacturing sector 62. A sector of the economy that is concerned with import
and export of goods.
53. It is a combined production of several units of a given A. Household sector B. Business sector
input? C. Government sector D. Global sector
A.Marginal Product B.Average Product
C.Total Product D.Additional Product 63. It is the income of households receive for supplying the
factors of production to firm such as land, labor, capital, or
54. Which of the following would most likely illustrate an entrepreneurship.
example of negative marginal utility? A. Factors payment B. Factor services
A. Eating a cup of ice cream. C. Transfer payment D. Injection
B. Watching another title of movie.
C. Drinking a second glass of juice with a meal. 64. All are leakage that reduce the flow of income in the
D. Eating too much food at eat-all-you-can buffet. circular flow of economy, except one?
A. Savings B. Imports
C. Exports D. Tax payment
APPLIED ECONOMICS REVIEWER - QUARTER 2 JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
65. Which constitute injections in the flow of income? 76. Which of the following will affect the growth of the
A. Savings B. Imports industry?
C. Exports D. Tax payment A. Migration of population from urban to rural areas
B. Migration of population from rural to urban areas
66. A place where households sell, and firms buy? C.Inaccessible location of business industry
A. Product market B. Factor market D. Unchanging trends in customer needs
C. Factors of production D. Goods and services
77. Maxim gives up eating four slice of cake. Which of the
67. A place where firms sell and households buy? following reason for giving up on eating?
A. Product market B. Factor market A. Price of the product B. Physical discomfort
C. Factors of production D. Goods and services C. Satisfaction of human wants D. Overspending

68. A payment that firms received in exchange of the 78. Which of the following illustrates the production flow?
goods and services sold to households? A. Leather - wool - bags B. Wheat - flour - bread
A. Income B. Revenue C. Logs - furniture - wood D. Steel - mineral - refrigerator
C. Expenditure D. Costs
79. What is a term used for satisfaction derived from
69. These are the inputs such as land, labor capital and consuming a good or service?
entrepreneurship firms used to produce goods and A. Utility B. Utility function
services? C. Inputs D. Consumption
A. Goods and services B. Factor market
C. Factors of production D. Firm 80. Which of the following is NOT an assumption of
marginal utility theory?
70. Refers to the flow of how money and output flow in the A. People derive utility from their consumption.
economy? B. More consumption yields more total utility.
A. Financial Flow C. Marginal utility diminishes with more consumption.
B. Circular Flow of Economic Activity D. Utility can be measured, and the units of utility are
C. Production Flow precisely defined
D. Physical Flow
81. What type of business organization faces double
71. A payment by a government to a household that is not taxation?
in exchange for a good or service? A. Corporation B. Cooperative
A. Transfer payment B. Factor payment C. Partnership D. Proprietorship
C. Income D. Wage
82. Mr. Lee was planning to start a department store. He is
72. Which sector not included in the circular flow of looking for areas where his product is marketable or where
economic activity? his competition is low. What factor does it refer to?
A.Government sector B.Business sector A. Buyer B. Industry as to size
C.Household sector D.None of these C. Product D. Geographic area

73. Which of the following theory describes how 83. All the following are claimed advantages of joint
consumers make decisions about what to buy given their ventures EXCEPT one:
income and prices of goods and services? A. Manufacturing costs will be divided between the firms in
A. Production theory B. Consumer theory the venture
C. Consumption theory D. Purchasing theory B. Management of the joint venture will never lead to
disagreement.
74. When the total product is maximum, what happen to C. Joint ventures between firms in different countries can
the marginal product? create new market opportunities
A. Positive B. Negative D. the costs of a new project can be split between the
C. Maximum D. Zero companies involved.

75. What sector reaps the fruits of natural resources like 84. What factor identifies and communicates the benefits
soil, water, and forests? of the business offering to the target market?
A. Agriculture, Fishery and Forestry sector A. Management trends B. Regulatory environment
B. Industrial sector C. Marketing strategy D. Trends in sales
C. Service sector
D. Manufacturing sector 85. It is a basic consuming unit, that makes use of goods
and services which are available in the economy
A. Business B. Government
C. Suppliers D. Households
APPLIED ECONOMICS REVIEWER - QUARTER 2 JENEVA MAE GEOCADIN, THU - JAN 19 - 9:07 PM
86. It has undergone some processing but needs to go 94. It constitute injection from circular flow of economy.
through additional processing before it can be used by the A. Import B. Savings
consumer? C. Tax payment D. Export
A. Raw materials
B. Intermediate goods 95. It constitute leakage from circular flow of economy.
C. Final goods A. Investment B. Tax payment
D. Consumer goods C. Export D. Government purchases

87. A key factor to consider in applying business that 96. Which of the following statements about cooperative
includes government laws and regulations. business organizations is true?
A. Buyers A. All cooperatives are only concerned with retailing.
B. Company information B. Profits are shared equally amongst members.
C. Geographical area C. They are owned by shareholders.
D. Regulatory environment D. Workers have no say in decision-making

88. What factor to analyze in determining the leading 97. In a corporation, owners share profit, but liability is
businesses in the industry? limited to -
A.Company information A. investment
B.Factors that affect growth of the industry B. distribution
C.Marketing strategy C. theft
D.Regulatory environment D. production

89. Which of the following is NOT an injection in the 98. The goal of this sector is to finance money to business
circular flow of the economy? firm, households, and government sector for them to use
A.Spending on imports for their investment and the same time, received money
B.Spending on exports from them as savings.
C.Spending by firms on investment A. Households
D.Spending by government on public goods and services B. Firm
C. Financial sector
90. Which one is the disadvantages of a sole D. Government
proprietorship business?
A. Capital is limited to the owner's savings and bank 99. Firms produce goods and services using inputs, such
loans. as labor, land, and capital (buildings and machines). What
B. Decisions take too long to make. do we call these inputs?
C. As they are government-owned there is no profit A. Factors of production
motive. B. Goods and services
D. The owners may disagree. C. Factor market
D. Firm
91. Which illustrate an example of negative marginal
utility? 100. It refers to the average contribution per unit of input
A. Eating a cup of ice cream. and is equal to TP/i.
B. Watching another title of movie. A. Marginal product
C. Eating too much food at eat-all-you-can buffet. B. Total product
D. Drinking a second glass of juice with a meal. C. Average product
D. Actual product
92. What key factor to analyze to know the most
successful businesses in the industry?
A. Company information
B. Competitor information
C. Geographical area
D. Regulatory environment

93. It states that additional units of a good are consumed,

the additional utility derived from each additional unit tends
to diminish?
A. Utility
B. Marginal Utility
C. Law of Diminishing Marginal Utility
D. Law of Diminishing Marginal Returns