Union Christian College

School of Business Science

Basic Microeconomics
Final Examinations

Name: Sobremonte, Joyce Anne B. Score:

Course & Year: BSBA 2 Date: December 16, 2023

True or False: Write True if the statement is true and False if the statement is false.
Knowledge and Comprehension) (10 marks) Supply /Provide the correct answer. Each
carries 1 mark.
FALSE 1. The area between the line of perfect equality and the Lorenz curve represents the degree
of equality in the distribution of total income.
TRUE 2. If employers offered a higher wage that equaled the marginal revenue product, employment
would rise.
FALSE 3. The supply for labor is an economics principle derived from the demand for a firm's
output.
TRUE 4. All other things unchanged, an increase in income will increase the demand for leisure.
TRUE 5. People supply goods and services in order to increase their utility
TRUE 6. Economic mobility may be considered a type of social mobility.
FALSE 7. Government significantly redistributes income from higher- to lower-income households
through the Lorenz curve.
TRUE 8. No government can run its administrative office without funds.
TRUE 9. When the tax burden is distributed based on the ability to pay, it fosters social cohesion by
reducing the disparity between different socioeconomic groups.
FALSE 10. The consumer protection act of 1991 was enacted for better protection of the interest of
consumer.

Identification: Identify the word or phrase being describe.

(Knowledge and Comprehension) (15 marks) Supply /Provide the correct answer. Each
carries 1 mark.
ECONOMIC EFFICIENCY 1. It is referred to as the relationship between the input of scarce
resources and the resulting output of a good or service.
LORENZ CURVE 2. It is a convenient means of visualizing the degree of income inequality.
PANTAWID PAMILYANG PILIPINO PROGRAM (4P's) 3. It is a conditional cash transfer program of
the Philippine government under the DSWD.
INCOME ELASTICITY 4. It is often measured in change in income.
INCOME DISTRIBUTION 5. It is the smoothness or equality with which income is dealt out among
members of a society.
UNEMPLOYMENT COMPENSATION 6. It is referred to as money that substitutes for wages or
salary, paid to recently unemployed workers under a program administered by a government or
labor union.
POVERTY 7. It is a condition in which a person or family does not have the means to satisfy basic
needs.
EQUALITY VS. EFFICIENCY TRADE-OFF 8. It is the presumption that an increase in income
inequality is required to increase.
PUBLIC INTEREST THEORY 9. It emphasizes the role of government as a benevolent entity that
aims to maximize societal welfare and address market failures.
LOCAL BUSINESS TAX 10. It is a tax imposed by municipalities on different types of businesses
within their jurisdiction
ABILITY TO PAY OF PRINCIPLE TAXATION 11. This principle recognizes that those with higher
incomes or greater wealth have a greater capacity to bear the burden of taxation compared to those
with lower incomes.
TAX TRAVEL EXEMPTION 12. This is typically granted to Philippine citizens who are working
abroad, as well as to certain foreign nationals who have been designated by the Philippine
government as official representatives of their respective governments.
CONSUMER PROTECTION 13. It deals with credit repair, debt repair, product safety , service and
sales contract, bill collector regulation, pricing, utility turnoffs, consolidation, personal loans that
may lead to bankruptcy and much more.
PUBLIC CHOICE THEORY 14. It applies economic analysis to the study of political decision-making
and emphasizes the role of individual choices and incentives.
ESTATE TAX 15. It is a tax imposed on the privilege of transmitting property upon the death of the
owner.
Multiple Choice: choose the best answer by writing the letter of your choice on the blank
provided.
(Knowledge and Comprehension) (25 marks) Supply /Provide the correct answer. Each
carries 1 mark.
B 1. Which of the following statements is not correct.
a. The Right to Safety is the right to be protected against products, production
processes and services that are hazardous to health or life.
b. The Right to Information is the right to be given the facts needed to make an
informed choice, and to be protected against dishonest or misleading advertising
and labelling.
c. The Right to Choose is the right to be able to select from a range of products and
services, offered at competitive prices with an assurance of satisfactory quality.
d. All of the above
e. None of the above
E 2. Which of the following statements is not correct.
a. The Right to Safety is the right to be protected against products, production
processes and services that are hazardous to health or life.
b. The Right to Information is the right to be given the facts needed to make an
informed choice, and to be protected against dishonest or misleading advertising
and labelling.
c. The Right to Choose is the right to be able to select from a range of products and
services, offered at competitive prices with an assurance of satisfactory quality.
d. All of the above
e. None of the above
B 3. It is the primary purpose of taxation.
a. To strengthen anemic enterprises by giving tax exemptions.
b. To reduce inequalities in wealth and income by imposing progressively higher
taxes.
c. To prevent inflation by increasing taxes or ward of depression by decreasing taxes
d. To protect local industries against foreign competition through imposition of high
customs duties on imported goods
e. All of the above
f. None of the above
A 4. An Act Prohibiting Business Establishments from Giving Insufficient or No Change to
Consumers and Providing Penalties.
a. Republic Act No. 10909 d. All of the above
b. Republic Act No. 10667 e. None of the above
c. Republic Act No. 7394
C 5. A consumer is referred to as …
a. someone who creates and supplies goods or services.
b. someone who could be both a producer and a consumer
c. groups of people who buy goods and services to use in producing other products
d. all of the above
e. none of the above
B 6. It states that governments are expected to make decisions based on the collective well-being of
the public.
a. Public Choice Theory d. All of the above
b. Public Interest Theory e. None of the above
c. Consumer Protection Law
C 7. The following can avail of travel tax exemptions except….
a. foreign diplomatic and consular officials
b. crew members of airlines flying internationally
c. government officials, and employees who are traveling for business purposes
d. all of the above
e. none of the above
B 8. The Right to Consumer Education means…
a. The right to live and work in an environment that is non-threatening to the well-
being of present and future generations.
b. The right to acquire knowledge and skills needed to make informed, confident
choices about goods and services
c. The right to receive a fair settlement of just claims, including compensation for
misrepresentation, shoddy goods or unsatisfactory services.
d. All of the above
e. None of the above

B 9. An act ensuring the availability of basic necessities and prime commodities at reasonable
prices at all times without denying legitimate business a fair return on investment.
 a. Republic Act No. 7394 d. All of the above
b. Republic Act No. 7581 e. None of the above
c. Republic Act No. 7160
A 10. This refers to the right to have access to basic, essential goods and services such as adequate
food, clothing, shelter, health care, education, public utilities, water and sanitation.
a. The Right to Basic Needs e. all of the above
b. The Right to Safety f. none of the above
c. The Right to Information
d. The Right to Choose
B 11. Tax imposed on individuals and corporations within the jurisdiction of a city or municipality.
a. Local business tax d. all of the above
b. Community tax e. none of the above
c. Amusement tax
A 12. Tax imposed on foreigners staying in the Philippines for at least 60 days, with permanent
residency status in the country, and applying for Re-entry Permit and paid to the immigration
officer when entering the country
a. Travel tax d. all of the above
b. Motor Vehicle User’s Charge e. none of the above
c. Head tax
A 13. It applies economic analysis to the study of political decision-making and emphasizes the role
of individual choices and incentives.
a. Public Choice Theory d. All of the above
e. Public Interest Theory e. None of the above
f. Consumer Protection Law
C 14. The Consumer Act of the Philippines.
a. Republic Act No. 7392 d. Republic Act No. 7395
b. Republic Act No. 7393 f. all of the above
c. Republic Act No. 7394 f. none of the above
A 15. This refers to the right to be able to select from a range of products and services, offered at
competitive prices with an assurance of satisfactory quality.
a. The Right to Choose d. all of the above
b. The Right to Information e. none of the above
c. The Right to Safety
A 16. It deals with credit repair, debt repair, product safety , service and sales contract, bill collector
regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy.
a. Consumer Law e. Consumer Protection Law
b. Consumer Protection Act f. all of the above
c. Consumer Protection g. none of the above
d. Consumer Protection Law
A 17. The following statements are correct except…
a. income receivers spend their first income received on products they value most
b. the tax and transfer process of income diminishes the income rewards of high-
income person and raises the income rewards of low- income person
c. Philippines' poverty line marks a per capita income of ₱16,841 a year
d. All of the above
e. None of the above
B 18. It is a tax-exempt, government- owned and government-controlled corporation (GOCC) of the
Philippines attached to the Department of Health.
a. Social Security System d. all of the above
b. Philippine Health Insurance Corporation e. none of the above
c. Department of Social Welfare & Development
A 19. It states that a society's income distribution falls somewhere in the middle between equal and
unequal.
a. Personal Income Distribution d. All of the above
b. Demographic Change e. none of the above
c. Growing Inequality

B 20. Which of the following is not related to income inequality.

a. Progressive taxation helps to reduce income and wealth inequalities by
redistributing resources from higher-income individuals to lower-income
individuals.
b. Minimum wage earners from both public and private sectors.
 c. The State ensure the availability of basic necessities and prime commodities at
reasonable prices at all times without denying legitimate business a fair return on
investment
d. All of the above
e. None of the above
E 21. It is a program of the government which aims to eradicate extreme poverty in the Philippines
by investing in health and education particularly in ages 0-14
a. Unemployment compensation d. all of the above
b. Salary loans program e. none of the above
c. Universal Health Program
E 22. The following are poverty trends in the Philippines except…
a. Philippines' poverty line marks a per capita income of ₱16,841 a year.
b. Poverty incidence among Filipinos eased to 24.9 percent in the first semester of
2013.
c. The faster growth of poor households' income implies a robust increase in real
incomes of the poor.
d. All of the above
e. None of the above
C 23. It is the proportion of population whose annual per capita income falls below the per annual
per capita poverty threshold to the total number of population.
a. Consumer Protection Law d. All of the above
b. Income Maintenance System e. None of the above
c. Incidence of Poverty
B 24. Which of the following statements is not related to the Income Maintenance System?
a. Enhances resource productivity.
b. Right to receive a fair settlement of just claims.
c. The right to live and work in an environment that is non-threatening to the well-
being of present and future generations
d. All of the above
e. None of the above
B 25. Which of the following statement is not correct.
a. If everyone earns exactly the same amount of money, then the income distribution
is perfectly equal.
b. The Lorenz Curve is a convenient means of visualizing the degree of income
inequality.
c. The government significantly redistributes income from higher- to lower-income
households through its taxes and transfer.
d. All of the above
e. None of the above

Prepared by: Checked Approved by:

MARIA TERESA C. UMAYBAS EMMA A. GANUELAS, MBA NELLIE M. GALVAN, CPA,
MBA
Faculty SBS Focal Person SBS Dean