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Agricultural Economics and Marketing 8. In the circular flow of the economy, what is the
Pre-Test corresponding payment for entrepreneurship?
A. interest
Please encircle the letter of the correct answer to the given B. profit/loss
questions. C. salaries
D. wages
1. What key element of an economic activity serves as the
motivating force? 9. It represents the point at which an economy is most
A. Human wants efficiently producing its goods and services, and therefore
B. Techniques of production allocating its resources in the best way possible:
C. Resources A. Law of Diminishing Returns
D. all of the above B. Production Possibility Frontier
C. Law of Demand and Supply
2. Of the following, economics may be best defined as the D. none of the above
study of:
A. how to allocate the family income 10. What market structure involves a few firms producing
B. How to maximize the profit ether standardized product or differentiated products?
C. how resources are used to produce goods and services to A. pure competition
be allocated among individuals in the society B.monopolistic competition
D. Why resources are scarce as they are C. pure monopoly
D. oligopoly
3. The term “ceteris paribus” means :
A. other things held constant 11. What market structure exists when there is only one firm
B. absence of government intervention producing a unique product?
C. scarcity or limited A. pure competition
D. closed economy B.monopolistic competition
C. pure monopoly
4. Which of the following is not an economic good? D. oligopoly
A. sunlight
B. a space satellite 12. What type of efficiency is attained when a firm produces
C. free parking on the street goods and services most valued or most wanted by society?
D. a free city concert in the park A. allocative efficiency
B. productive efficiency
5. Who introduced an economic system based on individual C. economic efficiency
self-interest? D. none of the above
A. David Ricardo
B. Adam Smith 13. It is the cost of a good that is foregone in order to have
C. Karl Marx something else
D. John Stuart Mill A.marginal cost
B.opportunity cost
6. What basic economic activity occurs when the ultimate C. fixed cost
consumer now gets to enjoy the goods or the service, which D. variable cost
he or she has bought?
A. consumption 14. Points below the production possibilities curve are
B. distribution interpreted as:
C. exchange A.attainable and efficient
D. production B.attainable but inefficient
C. unattainable
7. Food, clothing and shelter are examples of which type of D. most efficient
good?
A. basic goods 15. It refers to the behavior of people with regard to their
B. economic goods willingness and ability to buy products at a given price
C. free goods A. Demand
D. public goods B. Quantity Demanded
C. Supply
D. Quantity Supplied
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16. It refers to the limit of goods and services the producer is 24. What factor affecting consumer behavior is influenced by
both willing and able to offer for sale at each price, in a given personal outward characteristics such as buyer’s age and life
market and time. cycle and occupation?
A. Demand A. Cultural factor
B. Quantity Demanded B. Personal factor
C. Supply C. Social factor
D. Quantity Supplied D. Psychological factor

17. What is the market situation when the quantity supplied 25. Points beyond the production possibilities curve are
is greater than the quantity demanded? interpreted as:
A. shortage A.attainable and efficient
B. equilibrium B.attainable but inefficient
C. surplus C. unattainable
D. none of the above D. most efficient

18. What is the relationship between two goods when the 26. It measures the responsiveness of consumers to a price
price of one good does not affect the demand for the other change
good? A. Price Elasticity of Demand
A. complementary B. Price Elasticity of Supply
B.substitute C. Income Elasticity of Demand
C. independent D. Cross Elasticity of Demand
D. dependent
27. It refers to the impact on quantity demanded on a change
19. What is the market situation when the quantity supplied in purchasing power.
is greater than the quantity demanded? A. income effect
A. shortage B. purchasing power effect
B. equilibrium C. substitution effect
C. surplus D. multiplier effect
D. none of the above
28. Which of the following refers to the entire set of
20. Which of the following is a numerical score that obligations per unit of time incurred by the firm for fixed and
represents the level of satisfaction that the consumer derives variable resources ?
from a particular market basket? A.average total cost
A. Consumer Equilibrium B. marginal cost
B. Elasticity C. total cost
C. Demand D. explicit cost
D. Utility
29. It refers to the impact of a pure price change on the
quantity demanded of a certain commodity.
21. Reference groups, family and roles and status are
A. income effect
examples of which type of factor affecting consumer
B. purchasing power effect
behavior?
C. substitution effect
A. Cultural factor
D. multiplier effect
B. Personal factor
C. Social factor
30. It shows the different combinations of good X and good Y
D. Psychological factor
which yield the same level of utility.
A. utility curve
22. What type of utility ranks goods according to preference?
B. indifference curve
A. cardinal utility
C. demand curve
B. ordinal utility
D. supply curve
C. marginal utility
D. preferential utility
31. It refers to a consumers’ attempt to maximize total utility
or satisfaction from spending their income
23. What type of cost is also called visible costs?
A. Consumer equilibrium
A. Explicit costs
B. income equilibrium
B. Implicit costs
C. Market equilibrium
C. Marginal Cost D. Variable cost
D. Utility equilibrium
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32. It is a general term for payments for resources used 40. What indicator indicator of overall economic welfare and
during the production process: performance consists of the total output produced by the
A. cost factors of productions owned by Filipinos whether located
B. revenue domestically or abroad?
C. expenses A. GNP C. GIP
D. income B. GDP D. both a and b

33. It refers to total revenue minus total cost, including both 41. What GNP measurement refers to the total value of final
explicit and implicit costs. goods and services produced during the year at prices
A. accounting profit prevailing during that year?
B. economic profit A. current GNP C.non-current GNP
C. net profit B.real GNP D.annual GNP
D. gross profit
42. What approach in measuring GNP refers to the sum of the
34. What type of cost of resources whose employment is gross value-added by all sectors of the economy?
dependent on output level? A. expenditure approach
A. fixed cost B. industry-origin approach
B. implicit cost C. income approach
C. explicit cost D. sectoral approach
D. variable cost
43. Which of the following is a major program of CARP?
35. Which of the following refers to an additional cost A. Land distribution
resulting from the production of one additional unit of the B. Support services
output? C. Delivery of agrarian justice
A. average total cost D. all of the above
B. marginal cost
C. additional cost 44. RA 6657 also known as the Comprehensive Agrarian
D. variable cost Reform Program (CARP) law was enacted under whose term
of Presidency?
36. Which of the following cost of resources do not vary with A. Pres. Diosdado Macapagal
the quantity of output produced? B. Pres. Ferdinand Marcos
A. fixed cost C. Pres. Corazon Aquino
B. implicit cost D. Pres. Fidel V. Ramos
C. explicit cost
D. variable cost 45. The Department of Agrarian Reform was created under
whose term of Presidency?
37. Which of the following cost of resources do not require an A. Pres. Diosdado Macapagal
outlay of money by the firm? B. Pres. Ferdinand Marcos
A. fixed cost C. Pres. Corazon Aquino
B. implicit cost D. Pres. Fidel V. Ramos
C. explicit cost
D. variable cost 46. It measures the responsiveness of producers to a price
change
38. Which of the following is the primary purpose of A.Price Elasticity of Demand
taxation? B.Price Elasticity of Supply
A. compensatory purpose C. Income Elasticity of Demand
B. revenue purpose D. Cross Elasticity of Demand
C. regulatory purpose
D. none of the above 47. It measures how sensitive consumer purchases of one
39. What tax type is laid upon goods consumed, sold, or good (a) are, to a change in the price of another good (b)
manufactured within the nation? A.Price Elasticity of Demand
A. excise tax B.Price Elasticity of Supply
B. personal tax C. Income Elasticity of Demand
C. national tax D. Cross Elasticity of Demand
D. property tax
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48. When Cross Elasticity of Demand is positive, two goods

are:
A. Substitutes C. Independent
B. Complements D. both a and b

49. The following are determinants of Price Elasticity of

Demand, except for:
A. Substitutability C. Time
B. Proportion of Income D. Cost of Inputs

50. Necessity goods such as rice, milk and water tend to have
which kind of Price elasticity of demand:
A. Elastic C. Unitary Elastic
B. Inelastic D. none of the above