MT. CARMEL COLLEGE OF SAN FRANCISCO, INC.

San Francisco, Agusan del Sur

BACC1 - PRELIM EXAM

NAME: _________________________________________________________ YEAR & COURSE: _____________________

I. TRUE or FALSE. Write T for True and F for False

_________1. Allocation means distribution of goods and services within the economy.

_________2. Economics is the study of the allocation of scarce resources to meet limited human wants.

_________3. Scarcity means satisfying unlimited wants of the consumers.

_________4. An idle/unused land do not have an opportunity cost considering that it is idle/unused.

_________5. Generally, our wants and our desires for the things that we can produce with our resources are unlimited.

_________6. Wants are more vital and important than needs.

_________7. Macroeconomics is the branch of economics that focuses on the impact of choices on the total, or aggregate, level of
economic activity.

_________8. Unemployment rate is a concern under Microeconomics.

_________9. Inflation is a measure of the rate of change in the average price level for the entire economy.

________10. If our resources are unlimited, we could say yes to all of our wants and there would be no economics to speak of.

________11. Microeconomics is concerned with decision-making by individual economic agents such as firms and consumers.

________12. Both time and income are limited, thus, we cannot do all things all the time.

________13. Macroeconomics seeks to understand and explain how we make choices and how those choices affect our behavior in
the workplace, the marketplace, and society more generally.

________14. Mixed economies means that goods and services are supplied by both business and government.

________15. Labor is the human effort that can be applied to the production of goods and services.

________16. Capital is a factor of production that has been produced for use in the production of other goods and services.

________17. Money, office buildings, machinery, and tools are examples of capital.

________18. Natural resources are the resources of nature that can be used for the production of goods and services.

________19. People who would like to work but have not found employment are also considered part of the labor available to the
economy.

________20. One thing that is not considered capital is money.

________21. The wilderness is a natural resource.

________22. Businesses sell goods and services in the expectation that the market price will cover costs and yield a profit.

________23. Generally, using the economy’s scarce resources to produce one thing requires giving up another.

________24. Law of Increasing Opportunity is an economic principle that describes how opportunity costs increase as resources are
applied.

________25. Governments do not perform all of these society-enhancing functions.

________26. Markets play a key role in coordinating the choices of individuals with the decisions of business.

________27. If businesses can produce food more cheaply than individuals, the individual gains from using the market.

________28. Transportation equipment, such as cars and trucks, is capital.

________29. A firm can use money directly to produce other goods.

________30. It is the lack of a secure environment in many of the world’s economies that inhibits their growth and prosperity.

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 MT. CARMEL COLLEGE OF SAN FRANCISCO, INC.
San Francisco, Agusan del Sur
BACC1 - PRELIM EXAM

II. DIFFERENTIATION: Differentiate the four Market Structures:

1. Monopoly
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2. Oligopoly

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3. Monopolistic competition

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4. Perfect competition

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III. EXPLANATION: Explain the concept of “LAW OF INCREASING OPPORTUNITY COST” using the table/illustration below.

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 MT. CARMEL COLLEGE OF SAN FRANCISCO, INC.
San Francisco, Agusan del Sur
BACC1 - PRELIM EXAM

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