Republic of the Philippines

Department of Education
Region III
Schools Division of Bulacan
DOÑA CANDELARIA MENESES DUQUE NATIONAL HIGH SCHOOL
Midterm Examination
Applied Economics
Name: ______________________________ Grade&Sec: Date: _________________ Score: ______
I. Read the statements below carefully and encircle the letter of your choice. NO ERASURES.
1. It is a situation where there are not enough resources to satisfy our wants
A. Surplus B. Scarcity C. Economics D. All of the above
2. What does "There's no such thing as a free lunch" mean?
A. Some things cost nothing. C. Most things cost something
B. Most things cost nothing D. Everything costs something
3. Economic system where women tend crops and raise children while men hunt
A. Mixed B. Market C. Traditional D. Command
4. Economic system where government officials decide the distribution of all resources.
A. Mixed B. Market C. Traditional D. Command
5. Economic system where there is resistance to the introduction of new farming methods.
A. Mixed B. Market C. Traditional D. Command
6. Producers are looking to
A. buy goods B. earn a profit C. find incentives D. find the latest fad
7. The money left after costs are subtracted from revenue
A. free rider B. profit C. subsidy D. scarcity
8. A person who is free to open a grocery store is participating in a ______
A. command economy C. free enterprise economy
B. centrally-planned economy D. traditional economy
9. How is total revenue calculated?
A. multiply price by demand C. multiply change in price by change in demand
B. multiply price by quantity sold D. multiply change in price by quantity sold
10. Which describes a demand curve?
A. horizontal line B. slopes downward C. slopes upward D. bow-shaped
11. Which describes a supply curve?
A. upward slope B. downward slope C. horizontal line D. vertical line
12. Total costs =
A. fixed costs + marginal costs C. marginal costs + variable costs
B. fixed costs + variable costs D. fixed costs + variable costs + marginal costs
13. Total profit =
A. total revenue - marginal cost C. total revenue - total cost
B. total revenue + marginal cost D. total revenue + total cost
14. Lower prices typically ______
A. discourage consumers from buying C. motivate consumers to buy
B. discourage producers from leaving a market D. motivate producers to enter a market
15. The wage at which the number of workers needed equals the number of workers available is called _____
A. balanced wage B. fair wage C. equilibrium wage D. minimum wage
16. Workers with higher amounts of human capital tend to
A. demand less benefits C. have fewer job complaints
B. earn higher wages D. earn lower wages
17. Working in a location outside the office
A. contract work B. outsourcing C. self-employment D. telecommuting
18. Organization of workers that seek to improve working conditions
A. labor union B. closed union C. open union D. skill union
19. Equilibrium wage results from
A. an equal supply and demand of labor C. a shortage of labor
B. a fluctuating supply and demand of labor D. a surplus of labor
20. Money whose value is based on the type of material from which it is made
 A. commodity money B. fiat money C. near money D. representative money

21. What is a state of poverty in which income is insufficient for maintaining a minimum standard of living?
A. absolute poverty C. virtual poverty
B. relative poverty D. comparative poverty
22. What is the systematic approach in estimating the strengths and weaknesses of alternatives?
A. cost-benefit analysis C. cost- benefit threshold
B. cost-benefit dimension D. external migration
23. What is the term popularized by Gary Becker that refers to the stock of knowledge, habits, social and personality
attributes, including creativity, embodied in the ability to perform labor so as to produce economic value?
A. human capital B. human power C. human mind D. human resource
24. What is the graph of which the cumulative percentage of total national income (or some other variable) is plotted
against the cumulative percentage of the corresponding population (ranked in increasing size of share)?
A. Lorenz Curve B. Gini Coefficient C. Spillover effects D. Wastage
25. What is the number of households having an income below the Poverty Threshold?
A. poverty incidence B. poverty threshold C. poverty trap D. poverty
26. It refers to the economic events in one context that occur because of something else in a seemingly unrelated context,
what is it?
A. spillover effects B. spillover costC. spillover wastage D. surplus
27. It refers to the additional satisfaction or utility that a person receives from consuming an additional unit of a good or
service, what is it?
A. marginal benefit B. marginal cost C. social cost D. temporal dimension
28. What is the term being used to describe the amount of an asset or resource that exceeds the portion that is utilized?
A. Scarcity B. Shortage C. Surplus D. Wastage
29. What is the state of an employed person not having enough paid work or not doing work that makes full use of their
skills and abilities?
A. unemployment B. employment C. underemployment D. poverty
30. What is the term being used that states that the loss of potential gain from other alternatives when one alternative is
chosen?
A. opportunity cost B. knowledge capital C. explicit cost D. temporal dimension

II. TRUE OR FALSE: Write App if the statement is correct and Econ if not.
_____31. The Law of Demand states that, if all other factors remain equal, the higher the price of a
good, the less people will demand that good.
_____32. The Law of Supply demonstrates the quantities that will be sold at a certain price.
_____33. In Law of Supply, producers supply more at a higher price because selling a higher quantity at
a higher price increases revenue.
_____34. Time is not important to supply because suppliers must, but cannot always, react quickly to
a change in demand or price.
_____35. When supply and demand are equal the economy is said to be at equilibrium.
_____36. Disequilibrium occurs whenever the price or quantity is not equal to P* or Q*.
_____37. Excess supply states that, if the price is set too high, excess supply will be created within the
economy and there will be allocative inefficiency.
_____38. Excess demand is created when price is set above the equilibrium price.
_____39. On the demand curve, a movement denotes a change in both price and quantity demanded
from one point to another on the curve.
_____40. A shift in a demand or supply curve occurs when a good's quantity demanded or supplied
changes even though price remains the same.

___19. Which problem may occur if the economy is not growing as fast as growth of labor force? A. Inflation B. High crime
rate C. Poverty D. Unemployment
___20. What is the main reason why Philippines has low infrastructure? A. High unemployment rate C. Archipelagic
characteristic of the country
B. Rapid increase in population D. Insufficient government funds ___21. This pertains to the schedule of the willingness and
capacity of consumer to buy a commodity at alternative prices at a given point in time other this held constant. A. Elasticity
of supply C. Demand curve B. Elasticity of demand D. Supply curve
___22. What is the primary reason why even the public education is free, there are still out of school youths and have a
limited education and training? A. Inadequate support of parents C. Psychological issues faced by the students B. Problem in
the curriculum D. Huge opportunity cost of attendance ___23. What importance should the government recognize in order to
develop economic growth in terms of human resource? A. Investment on modern technology C. Better infrastructures
B. Sustainability of the environment D. Investment on higher education and research ___24. What is the most vibrant
industry in the service sector which is one of the leading contributors of foreign exchange in the country and provide
employment to millions of Filipino workforce? A. Business Process Outsourcing C. Overseas Filipino Workers
B. Manufacturing industries D. Agricultural Sector ___25. Mining as one of the contributors in the economic stability and
growth of our country is also deemed harmful in many aspects. What should the government do in order to eliminate its
harmful effect to the environment without compromising the economy? A. Selective banning on mining C. Partial ban on
mining B. Total ban on mining D. Increase business tax
___26. Which is TRUE about supply curve? A. As the price decreases, supply increases B. As the price increases, supply
decreases C. As the price increases, supply also increases D. There is no relationship between the two ___27. It is defined as
a schedule showing a direct or positive relationship between the price of commodity and the level of output that the seller is
willing to supply at a given point in time other things held constant. A. Supply curve C. Elasticity of supply B. Demand curve
D. Elasticity of demand ___28. This is caused by changes in the other factors affecting supply except the price of commodity.
A. Shift in the supply curve B. Movement along supply curve C. Shift in the demand curve D. Movement along demand
curve ___29.. How can taste affect the demand of the commodity? A. A higher level of income will give him higher capacity
to consume B. Prospect on what is going to happen on the price can influence the demand for the commodity C. An increase
population can contribute to the expansion of existing market D. Based on the cultural values and through peer pressure or
advertising