INCORRECT

 Demand increases if the entire demand curve shifts to the left.

  Surplus happens when the quantity supplied is less than the quantity demanded.

 Expectations about future does not alter the demand for a specific commodity.
 Statement 2: More income for consumers to generate, increases their demand to all type
of goods to consume.
 A change in quantity demanded is brought by an increase (decrease) in the product’s
own price and the direction of movement is positive considering the law of demand.
 Statement 2: A change in demand is brought by an increase (decrease) in demand due
to factors like changing incomes, taste or preference, and product's own price .
 circular flow model of economy- A diagram that shows how economy works involving
government, households, foreign traders and local firms.
 A model that illustrates economic resources being utilized by household sector provided
by the firm sector to create products that will satisfy the wants and needs of people.
 When supply of goods and services are infinite for the fulfillment of human wants and
need.
 A capital is manmade product used in the production like the building, factories, machinery and
human efforts  used in the production process
 resource market- A place wherein goods and services are being traded between firms and
households
 Businesses compare the cost incurred in production and revenue in selling goods and services on
determining if they met profit maximization objective.
 Businesses provides the factors of production or economic resources needed in producing goods
and services.   
 Law of demand states that if price of a good or product goes up, the quantity demanded
for it will also increase.
 Being efficient in production and allocation of goods and services saves money time and
decreases a firm’s output. 
 Overproduction results to excess (shortage) goods and services going to waste. 
 Statement2: Underproduction (surplus) results to a failure to meet the needs and wants of
the society.
 Efficiency means saving money and time but decreases the firm’s production ability.
 Ceteris Paribus complicates complex situations in analyzing economic condition.
 What to produce is the question that identifies the people or sector who demand the commodities
produced in society.

 Land resources includes agricultural products capital goods that can be used in
production.
 Statement2: Interest is the compensation of utilizing land resources. 
 There is a change in demand if there is a movement from one point along the same demand
curve.
 A consumer/buyer influence the supply of goods or product goes up, the quantity demanded
will increase.
 Microeconomics also focuses on the buyer and seller, and it concerns how firm maximizes its
profits and how consumers maximizes his satisfaction.
 In traditional economy, buyers and sellers agree the purchase price of goods and services.
 Laissez-Faire economic theory focused on the analysis of individual decision-making and
the goals of personal satisfaction.     
 Statement2: Free market or ideal market was controlled by government who sets or
regulates price directly or regulating the demand and supply in the market
 Economics refers to as the limited availability of economic resources relative to man’s unlimited
demand for goods and services.  
 Economic governance in basel was controlled by the private entities and government
 Household sector sells resources to and buy products from the business sector
 Businesses sell their products to buyers in resource market.
 Firms buying finish goods and services to household
 Equity involves proper allocation of scarce resources to increase firm’s production output
 As the price of the product fall, purchasing power of buyers increases thus – allowing to buy
lesser product.
 When price of goods and services increases, buyer’s real income increases allowing them to buy
more products.
 As preference and taste become inclined for a healthier products, demand will certainly
decrease for these particular products.
 Sellers/producer influences the demand for goods and services as they aim profit
maximization.
 When the producers expect lower prices of commodities in the future, the
tendency is To keep goods and release it only in the future where prices shift,
Increasing the future supply for such commodities
 A change in quantity supplied illustrate an inverse relationship of product’s own price.
 Supply function helps in showing the relationship between demand for commodity and
the factors that determine or influences demand.
 Law of supply means lower price entices the producers or sellers to supply more of
goods and services
 There is a change in supply if there is a movement from one point to another
point along the same supply curve due to non-price factors.
 Statement 2: A supply curve has negative slope, showing positive/direct
relationship between price and quantity supplied
 A change in quantity supplied illustrate an inverse relationship of product’s own price
and quantity supplied.
 Statement 2: A change in supply happens when the entire supply curve shifts leftwards
resulting to an increase in supply due to factors other than the product’s own price.
 Statement 3: Availability of economic resources, increasing number of sellers, future
price expectations and technological changes are some of the forces that affect the
changes in quantity supplied.
 Supply is the maximum units/quantity of goods or services consumers willing to sell or offer
 Sellers/producers will produce or sell more goods and services at lower prices
 Price, customer’s preference and cost of inputs are some of the factors that affect the supply
 Producers or suppliers sells more goods and services at a higher price for the purpose of
demand satisfaction
 De creases the quantity supply, removing qoutas and tariffs in the importation of sugar
 Decreases the quantity supply, in car industry – rise in the dealers of cars such as ford, kia,
Hyundai, mg, and etc.
 A shift in the demand curve may result from Changes or expected changes in the price of
resources, Changes in the number of sellers in the market
 Demand is generally affected by the behavior of producers.
 Substitute products are more attractive for buyers when they are being offered at higher
prices.
 Ceteris paribus is an assumption in identifying the value of what is given-up when one
makes a choice.
 Statement 3: Opportunity Cost is an assumption is used as device to analyze
relationship between two variables while the other factors are held unchanged.
 As preference and taste become inclined for a healthier products, demand will certainly decrease
for these particular products.
 A supply curve has negative slope, thus it slopes downward from left to right that
indicates inverse relationship between price and quantity supplied.
 The law of supply implies that an increase in the non-price factors increases the quantity
supply because the profitability of businesses increases
 b. Increasing population leads to decreasing demand for products specially the
necessities.
 There is an increase in demand of a product if the price of complementary good
increases.
 key factors of Macroeconomics, except Government spending
 The introduction of cost-reducing innovations in the production technology decreases
supply.
 A capital is a natural-made product used in the production-process that creates goods
and services.
 Statement 2: The reward for the use of capital is called interest or dividends and
reduction of productive capacity of capital is appreciation.
 Microeconomics deals with the behavior of economy as a whole, studies the relationship
among broad economic aggregates like national income and national output
 Employing capital-intensive production, uses more human resources or manual labor in
producing goods services.
 Labor-intensive production employs more technology and capital goods like machineries and
equipment in producing goods.
 An economy cannot be represented by intangible domains where goods and services are being
traded.
 Quantity Equilibrium is the agreed quantity the seller willing to sell but the buyer unwilling to
purchase.
  disadvantages of imposing price ceiling: Create greater shortage, Sellers sell in illegal market
where prices are high
 In the long run, a ceiling price will create bigger surplus of goods in the market as consumer will
demand more for a product in this imposed price.
 Price control- To keep essential goods affordable, sellers are required to sell their products at a
maximum price above the equilibrium price.     
 Price elasticity of demand refers to how quick the reaction or the responsiveness of consumers’
demand to change in price of the related goods sold
 b. If price elasticity is inelastic, it means that a change in an income determinant results in a
proportionately lesser change in the quantity of demand.
 A price ceiling is usually above the equilibrium price, imposed in times of persistent
surplus of goods.        
 Statement 2: Price ceiling is imposed to the prices of goods affected by market shortage
so that it will increase persistently.
 Goods are any intangible economic activities that contributes to the satisfaction of the needs,
wants, or desires of the consumers.
 economic goods- has value attached to it and free to be used or consumer, unlimited supply that
can satisfy everyone need without paying for it
 Total utility increases as we consume lesser quantity of goods and services.
 Marginal utility means the total satisfaction a consumer derives from consuming more and more
goods and services.
 Composed of potential workers like retirees, fresh college graduates and working students.
 If the firm decides to shuts down temporarily, its output level and total cost will be zero.
 Keynesian theory highlights that wage is the primary cause of why unemployment exist.
 Total utility increases as we consume lesser quantity of goods and services.
 b. Marginal utility means the total satisfaction a consumer derives from consuming
more and more goods and services
 When demand is constant and there is a decrease in supply, it shifts the supply curve to the left
which raises equilibrium price and quantity.
 The budget constraint indicates the combination of two goods that can be purchased
given the consumer’s income and prices of the two goods, thus any combination of the
two beyond the budget constraint becomes affordable. BUDGET LINE

when market supply decreases while demand remains constant?  Supply curve shifts to right,
equilibrium price increases.
Statement 2: Demand curve shifts to the right and equilibrium quantity increases.
Statement 3: Both equilibrium price and quantity decreases.
 Goods are any intangible economic activities that contributes to the satisfaction of the
needs, wants, or desires of the consumers.
 If a percentage change in price results in a more than proportionate change in quantity supplied
then quantity supplied is said to be price elastic.
 In indifference curve, a consumer is indifferent among the combinations of goods or services
being offered along the same curve but prefers the combination in the lower indifference curve.

 
 If there are too few/no available to substitute for the product sold in the market, elasticity for the
product will be high.

when market supply decreases while demand remains constant? Supply curve shifts to right,
equilibrium price increases.
Statement 2: Demand curve shifts to the right and equilibrium quantity increases.
Statement 3: Both equilibrium price and quantity decreases
 A floor price is usually set below the equilibrium price, imposed in times of persistent
shortage of goods.
  Labor force, Composed of potential workers like retirees, fresh college graduates and working
students.
 If the firm decides to shuts down temporarily, its output level and total cost will be zero.

 Decreasing marginal returns occur when the marginal product of an additional input is
more than the marginal product of the previous input to use in producing product.
 Statement 2: Increasing marginal returns happens when more number of workers are
employed and lesser marginal product produced compare to the production of the
previous smaller workers.
 Marginal revenue product is the change in revenue resulting from the lesser output
produced by one additional unit of input.
 Statement 2: Marginal product is the additional revenue generated by employing one
additional factor of input.
 Production possibility frontier? Combination of goods along the production possibility curve is
not producing enough goods given the firm’s available resources.
 In getting marginal product using labor input, get the difference of two consecutive total product
and labor, then multiply them

input resources - Variable inputs are components of production which do not change as output level
changes.
b. In the short-run, fixed inputs are the changeable resources in the production.
 production concepts? - When total product curve reaches its highest peak, there is no marginal
product generate.
 C. Starting from production at origin until the highest portion of average product and marginal
product, the total product decreases.
 In the long run, a ceiling price will create bigger surplus of goods in the market as consumer will
demand more for a product in this imposed price.
 To keep essential goods affordable, sellers are required to sell their products at a maximum price
above the equilibrium price - price control
 Price elasticity of demand refers to how quick the reaction or the responsiveness of consumers’
demand to change in price of the related goods sold
 b. If price elasticity is inelastic, it means that a change in an income determinant results in a
proportionately lesser change in the quantity of demand.
 A price ceiling is usually above the equilibrium price, imposed in times of persistent surplus of
goods.        
  Statement 2: Price ceiling is imposed to the prices of goods affected by market shortage so that it
will increase persistently.
 when demand is constant and there is an increase in supply. Demand curve shifts to right, There
is a reduction in equilibrium quantity.

CORRECT


 If both demand and supply shift right, The equilibrium price will depend on the price upon on the
relative sizes of the change in demand and supply.
 What effect will a supply increase and demand decrease for mangoes have on the equilibrium
quantity? Indeterminate
 Elasticity of Demand deals with the sensitivity of quantities bought by a consumer to a change in
price. If elasticity coefficient is less than 1 - The demand for product is inelastic.

disadvantages of imposing price ceiling, Create greater shortage

b. Sellers sell in illegal market where prices are high
 Price floor is implemented to compensate suppliers specially the producers of agricultural
products, buyers will purchase product at minimum price above equilibrium price.
 production concepts - Total product refers to the total output produced after utilizing the fixed
and variable inputs in the production process.
 Price ceiling could lead suppliers to sell goods illegally to control price and earn high profits.
 In using labor input, we can solve average product by means of dividing total product by the
number of labor.
 If the demand for Klioh is constant and supply decreases because of the limited availability of 
materials, the new Equilibrium Price (PE) and Quantity (QE) will? PE will increase, QE will
decrease, PE will increase, QE will decrease
 Any resource quantity of which cannot readily be change when market conditions indicate that a
change in output is desirable.  Fixed input
 Production possibility frontier? Input resources are efficiently utilized when production of one
good cannot be increased without simultaneously decreasing the production of other good.
b. Combination of goods beyond the production possibility curve needs to have an increase or growth in
the resources of the firm to achieve the desired output level.

 A firm can shut down temporarily when total variable cost exceed total revenue
 Labor force? Composed of potential workers like retirees, fresh college graduates and working
students.
 Are those who qualified for the jobs, willing to work and willing to accept the on-going rate

 If shortage happens, it is the consumer who influences the price to go up since they will
bid up prices in order for them to acquire the goods and services and to restore
equilibrium in the market.
c. When there is a surplus, the tendency of sellers is to lower the market prices of the
goods and services to be easily disposed in the market.

 When the quantity demand of a good and the price of related products change in opposite
directions, it is considered as complementary.
 Statement 2: Cross elasticity of demand for a substitute happens when a fall in the price
of substitute good brings a decrease in the quantity demand of the other related good.
 The demand for a product is considered inelastic when the change in quantity demanded is less
than the change in price and elasticity coefficient is less than 1.
 A consumer surplus is the difference between the total amount that we are willing and
able to pay for a good or service and the total amount that we actually pay for that good
or service.
 Statement 2: Consumer Surplus is created as people are willing to spend differently on a
given good or service.

public goods? goods produced by the government for the consumption of public
c. goods that will satisfy/give benefit to the public like hospitals, roads, schools and
water dams

 advantages of imposing floor price - Prevention of bigger losses of the producers
 A higher indifference curve implies a higher level of satisfaction.
 If a percentage change in price results in a less than proportionate change in quantity supplied
then quantity supplied is said to be price elastic.
 Equilibrium price and quantity changes in response to the shifting/ changes in the supply
and demand curve to achieve state of balance.          
 Statement 2: Equilibrium price will increase in times when buyers have greater income to
demand more for a product while the producers’ supply do not change.      

 Services are intangible, non-material things that can satisfy human wants.
 Normal necessities are considered to be income inelastic since these goods cater to our
basic human needs that no matter how much the price changes, we will still buy it.
 Statement 2:  Consumer of normal necessities goods increase their purchases as their
income rise.

 If both supply and demand for goods or services increase, the market equilibrium price will?
UNDETERMIED
 Surplus and shortage are the effects when market is in the state of disequilibrium.     
 Statement 2: As shortage exist, prices are adjusted/pressured upwards to attain balance in
the market.

 If the demand for Coke is constant and supply decreases because of the limited availability of raw
materials, the new Equilibrium Price (PE) and Quantity (QE) will? PE: Increase, QE: Decrease
  budget line - If the income of the consumer increase, the consumer has the ability to buy
more or higher combination of goods, thus will cause the budget line to shift to the right.
 If supply increases and demand decreases, both changes equilibrium price resulting to a price
decrease.
 included in fixed costs - Rent for office space
 Employment - Keynesian theory states that employment is determined by the aggregate demand
for goods and services.
 A firm can shut down temporarily when total variable cost exceed total revenue.
 Labor force Are those who qualified for the jobs, willing to work and willing to accept the on-
going rate
 Potential workers are those who are an 18 years old, working 5 hours a day in a fast food chain
 Love and belonging needs are social needs which relate to human interaction. which of the
following is/are not part of love and belong needs?  Self-confidence and independence, emotional
stability and well-being
 Goods that are being used/consumed as an input needed in producing another goods, capital
goods
 Utility - It denotes satisfaction/pleasure a consumer can derived from consuming goods and
services. A consumer satisfaction or utility derived in the consumption of an additional unit of
goods decreases as he/she consume more and more of it.
 .Services are intangible, non-material things that can satisfy human wants
 What will happen to equilibrium quantity of mobile phones if both supply and demand decrease?
Decrease
 If both demand and supply shift right, The equilibrium price will depend on the price upon on the
relative sizes of the change in demand and supply.
 What effect will a supply increase and demand decrease for mangoes have on the equilibrium
quantity, Indeterminate
 Price control - Price floor is implemented to compensate suppliers specially the producers of
agricultural products, buyers will purchase product at minimum price above equilibrium price.
 advantages of imposing price ceiling, protect consumers from abusive producers or sellers
 Price ceiling could lead suppliers to sell goods illegally to control price and earn high profits
 If the demand for Coke is constant and supply decreases because of the limited availability of raw
materials, the new Equilibrium Price (PE) and Quantity (QE) will PE: Increase, QE: Decrease
 when demand is constant and there is an increase in supply. The supply curve shifts to the right
 Price Equilibrium is the agreed price the seller agreed to offer its goods or services and the buyer
to pay for it. 
 Shortage is being influenced by having more demand from buyers and seller can’t provide to all
of these buyer’s demand.      
 households gives to firms as compensation for the consumption of goods and services
Consumption expenditures
 Microeconomics focuses to the seller on how they maximizes profits and buyer on how
they maximizes their satisfaction.
 change in demand if price of complementary goods increase, price of substitute goods
decrease
 Natural disasters may reduce the supply of agricultural commodities and can delay the
deliveries of economic resources or inputs needed for production of product.
 One of the economic resources used for production is capital. Capital creates the expectation
that its use will improve or increase future production.
 Quality of the product, promotion/advertisement and endorsers can also
influence/change the demand.
 There is a change in demand if consumers’ tastes or preferences change with regards
what they want to buy of a product at a given price.
 Law of supply states that if the price of a good or service goes up (down), the quantity
supplied for such good or service will also go up (down), applying ceteris paribus.
 Supply function helps in showing the relationship between supply for goods or services
and the factors that determine or influences supply.
 An increase in the population means higher demand for goods and services.
 Ceteris paribus was devised to simplify complex economic phenomena.
 Increase in the price of one product causes to the decrease of complementary product's
demand.
 Consumer identifies his or her needs, wants and demands as they tries to fulfill or
maximize his/her satisfaction.
 Economics is the study of the problem of using available economic resources as
efficiently as possible so as to attain the fulfillment of society’s unlimited demand for
goods and services. When limited resources fail to meet the unlimited wants of the
society, economics comes into play in order to effectively and effecient alllocate
resources.

 One of the factors why demand changes for a certain product or services because of changing
incomes. As income increases, Demand curve of normal good shifts to the right
 Supply increases may be due to lower cost of inputs/production cost or decreases in the taxes
impose by the government (slanting //)
 An increase in supply happens when acquiring cost-reduction production technology, abundant
economic resources available from suppliers
 Decreases the quantity supply, in accounting practice industry – decreasing the national passing
percentage for certificate for public accountant licensure examination
 Producers supply lesser quantity of goods and services having lower price, as it diminishes their
goals of maximizing income and the opposite thing will happen when price increases
 When the price of SUV increases 4 million to six million, producer is induced to produce more to
maximize profit
 Decreases the quantity supply, increasing the requirements before nurses can practice their
profession
  There is a decrease in supply when curve shifts to the left
 Law of supply states that if the price of a good or service goes up (down), the quantity
supplied for such good or service will also go up (down), applying ceteris paribus.
 Statement 2: Sellers/producers will produce or sell more goods and services at a
higher prices.
 Statement 3: The more sellers/producers in the market, the greater the supply of
goods and services will be available
 Supply can be analyze through supply schedule, supply curve and supply function
 law of supply An assumption used to analyze the relationship of price and quantity
supplied assuming there is no change in non-price determinants.
 A supply curve for product slopes upward from left to right indicating that as price
rises(falls), more(less) is supplied.
 A change in quantity supplied illustrate an inverse relationship of product’s own price.
 A change in supply happens when the entire supply curve shifts leftwards or rightward
resulting to an increase (decrease) in supply due to other factors than the product’s
own price.
 A decrease in supply happens when there is lack of labor/workforce for productionan a
 A decrease in supply happens when When prices of raw materials needed for
production increases,
 The main goal of the firms is profit maximization, that’s why they are willing to
sell/produce more units/quantity of goods and services when their products’ prices
increase. When supply curve shifts to the left
 Macroeconomics is a branch of economics which deals with the individual decisions of units of
the economy like firms and households, and how their choices determine relative prices of goods
and factors of production.
 Market can be represented by intangible domains where goods and services are being traded.
 Individual or households use their income in selling their economic resources to buy goods and
services that will satisfy their wants and needs
 Distinct characteristics of entrepreneurship as economic resources: entrepreneurs have the
skills to manage the factors of productions, the ability of face and manage uncertainties
involving everyday business activities, know how to make business decisions specially in
answering the economic decision problems.
 Creating product and services with proper allocation and utilization that will lead to satisfying
human needs and wants is the role of Economics.
 Socialism emphasis is on equitable distribution of income and wealth.
 households sell/give to firms Land, labor, entrepreneurial skills
 Effectiveness will be achieved when firms reach the production quantity required that will
satisfy the demand of consumers.

The circular flow of economy tells us how firms and households interact with each other and
provides resources and goods to satisfy the wants and needs for the production and consumption.
Flow of factors of production, Flow of goods and services, Flow of payment
 Unlimited quantity of goods that can be produced out of the available resources and
limited wants and needs of people creates scarcity.
 Statement2: When human wants and needs are unlimited and the available resources
for the creation of these are infinite, scarcity will naturally be the result that triggers
resource allocation problems.
 Ceteris Paribus means all other things held unchanged.
 Distribution decision problem can be address through proper allocation of all resources for the
benefit of the whole society.      
 Demand can be analyze through tabular representation showing the relationship of demand and
price /factors, graphical representation of the relationship of demand and price
 Demand function or usage of mathematical equation
 Effectiveness means attainment of goals and objectives.
 Entrepreneurship is not considered as part of Labor factor because it uses managerial skills
needed in building operating and expanding business.
 Change in demand (whether increase or decrease) is brought by factors other than the price of the
good itself.

 Businesses incurs cost on using economic resources in the production of goods and
services.
  resource market- A market wherein households sell the factors of production they have.
 basic economic questions that can be answered by the different economic system?
What goods and services to produce
The quantity of producing goods
For whom should these goods and services be produced
 one of the factors why demand curve changes for a certain product or services because of
the future price expectations. As future prices increase, current demand for products and
services will increase.
 Capital economic resource creates the expectation that its use will improve or increase
future production.
 An increase in the population means higher demand for goods and services
 Economics was developed Due to scarce means of production that couldn't satisfy the
needs and wants of society.
 Shifting of the whole demand curve or change in demand is(are) due to Changing
Income
 A market exist to facilitate the exchange of goods, services and resources.
 Statement 2: Market exist when there is someone who offers his/her service and
someone who will demand/buy for this service.
 circular flow model of economy- Household sector owns/creates economic resources
which being used to produced goods and services by the firms’ sector.

 A change in quantity demanded illustrate an inverse relationship between product’s own
price and demand for it.
  Increasing one’s income generally raises his or her purchasing power to demand for
goods or services which he/she is not able to purchase at lower income and vice versa.
 Statement 2: The demand for inferior goods decrease when income of the consumer
increases
 Household receive interest, salary, and products in selling economic resources
 Change in quantity demanded of good happens, if the price of the good being sold
changes.
 Statement 2: Demand curve is negatively sloped that indicates as the commodities' price
increase, lesser commodities will be bought by the consumers.
 Demand curves slope downwards is attributed to consumer tend to buy more products when
price of it decreases.
