Multiple Choice Questions

Please read the statements carefully. Encircle the correct answer.

1. In the market, the price elasticity for the demand of canned goods sold by
Aling Puring Grocery Store is the:
a) ratio of the percentage change in quantity demanded for the goods to the
percentage change in its price
b) responsiveness of revenue to a change in quantity of the canned goods
c) ratio of the change in quantity demanded divided by the
change in its price of the canned goods
d) response of revenue to a change in the price
2. If demand for sacks of rice in Aling Puring Grocery Store is price elastic, then a:
a) rise in the price of sacks of rice will raise total revenue of the grocery
b) fall in the price of sacks of rice will raise total revenue of the store
c) fall in the price of sacks of rice will lower the quantity demanded
d) fise in the price of sacks of rice won't have any effect on total revenues
3. If the cross-price elasticity between soap bar and liquid soap commodities is 1.5,
a) the two goods are luxury goods
b) the two goods are complements
c) the two goods are substitutes
d) the two goods are normal goods
4. The price elasticity of demand for a certain good tends to be:
a) smaller in the long run than in the short run
b) smaller in the short run than in the long run
c) larger in the short run than in the long run
d) unrelated to the length of time
5. If the price elasticity of supply of cup noodles is 0.60 and the price increase by
3 percent, then the quantity supplied for cup noodles increases by how by?
a) 0.60 percent.
b) 0.20 percent
c) 1.8 percent
d) 18 percent
6. An increase in the price of electricity bill will force you to:
a. increase your demand for kerosene heaters and coal.
b. increase your demand for light bulbs and aircon.
c. increase your demand for stereos and videokes.
d. increase your demand for TVs and use of gadgets.
7. The market demand curve for apple shows the
a. effect on market supply of a change in the demand for apple
b. quantity of an apple that consumers like to buy at different prices.
c. marginal cost of producing and selling different quantities of an apple.
d. effect of advertising expenditures on the market price of an apple.
8. Economies experience an increased in unemployment and a reduced of
activity during recession. How does recession affect the market demand for new
cars?
a. Demand for new cars shifts to the right.
b. Demand for new cars shifts to the left.
c. Demand for new cars has no shift
d. Demand for new cars either has or no shift

9. The market supply curve for gasoline shows the

a. effect on market demand of a change in the supply of gasoline.
b. quantity of gasoline that firms offer for sale at different prices.
c. quantity of gasoline that consumers are willing to buy at different prices.
d. All of the above are correct.
10. If Toyota firm is producing a car faster than people want to buy, there is
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.

True or False. Write the word True if the statement is true; write False if the statement is false.

________6. The word economics derived from the Greek word” Oikonomus” meaning household
management.
________7. Adam Smith is the Father of economics.
________8. Economics is applied in in our daily lives.
________9. Scarcity is the central economic problem.
________10. To address the unlimited needs and wants of the people with the limited resources is
one of the significant concerns in economics.

________1. Economics as social science has something to do with our everyday lives.
________2. One a man is applying a job to sustain its basic needs shoes is an example of economics
as social science.
________3. There two branches of economics the microeconomics and the macroeconomics.
________4. Applied Economics is an application of conclusion from the different economic theories.
________5. Using economic theories, applied economics tries to address the central problem of
economics which is scarcity.