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3RD QUARTERLY EXAM

APPLIED ECONOMICS
Direction: Encircle the letter of the correct answer
1. Is the study that attempts to explain how an economy operates and how the consumer attempts to maximize
his/her wants within limited means.
A. Economics C. scarcity
B. Microeconomics D. Macroeconomics
2. Is a condition where there are insufficient resources to satisfy all the needs and wants of a population.
A. Scarcity C. insufficiency
B. Economics D. none of the above
3. Economics as __________ because it studies of observing how theories work in practice
A. Social C. psychology
B. Applied D. Scarce
4. Economics as ____________ science, because it studies human behavior and how individuals make choices in
allocating scarce resources to satisfy their unlimited wants.
A. Applied C. social
B. Scarce D. econometrics
5. An applied economics where there is an application of statistical and mathematical theories to economics for the
purpose of testing hypotheses, forecasting future trends, and compare and contrast against real life.
A. Microeconomics C. Economics
B. Macroeconomics D. Econometrics
6. It refers to the quantities of a particular good or service that consumers are willing and able to buy different
possible prices.

A. Demand B. Supply
C. Income D. None of these
7. What curve does a demand illustrate?
A. Downward Sloping B. Upward Sloping
C. Straight Line C. All of these
8. What is your analysis?

Statement I: More sellers in a market – decrease supply.

Statement II: Fewer sellers in a market – increase in supply.

A. Both statements are true B. Only statement I is true

C. Only statement II is true D. Both statements are false
9. What is your analysis?
Statement I: When the price goes up the supply goes up.

Statement II: When the price goes down the supply goes down.

A. Both statements are true B. Only statement I is true

C. Only statement II is true D. Both statements are false

10. Buyers and sellers transact in a market when they agreed on the price of the commodity and the amount to be
sold and bought. What basic principles in economics does the statement express?

A. Law of Supply B. Law of Demand

C. Equilibrium Price D. Price Disequilibrium

11. It is an economic principle referring to a consumer's desire to purchase goods and services and willingness to
pay a price for a specific good or service.
A. Demand B. Supply

C. Income D. Expenditure
12. It is the amount of a product that is offered for sale at all possible prices in the market.
A. Demand B. Supply
C. Income D. Expenditure
13. What curve does a demand illustrates?
A. Downward sloping B. Upward sloping
C. straight line D. None of these
14. What curve does a supply illustrates?
A. Downward sloping B. Upward sloping
C. straight line D. All of these
15. What is it when buyers and sellers transact in a market when they agreed on the price of the commodity and
the amount to be sold and bought.
a. Law of Supply B. Law of Demand
C. Equilibrium Price D. Price Disequilibrium

16. It is when there are disagreements among buyers and sellers on the price and quantity.
a. Law of Supply B. Law of Demand
C. Equilibrium Price D. Price Disequilibrium

17. The law of demand states that the quantity of a good demanded varies ____________________.
a. inversely with its price. B. directly with population.
C. directly with income. D. inversely with the price of substitute goods.

18. The following are factors of demand EXCEPT for_______________________.

a. Changes in income B. Technology
C. Price of the product D. Changes in number of buyers
19. What is your analysis?
Statement I: More sellers in a market – decrease supply.

Statement II: Fewer sellers in a market – increase supply

a. Both Statements are true B. Only statement 1 is true

b. Only Statement II is true D. Both statements are false

20. A decrease in supply shifts the supply curve to the left, which raises price but reduces output.
a. shifts the demand curve to the left
b. shifts the demand curve to the right
c. shifts the supply curve to the left
d. shifts the supply curve to the right
21. When the quantity consumers are willing and able to buy equals the quantity that producers are willing and
able to sell.
a. Surplus B. Shortage
b. C. Market Equilibrium D. None of these are correct
22. At a given price, the amount by which quantity supplied exceeds quantity demanded; it usually forces the
price
down.
a. Surplus B. Shortage
b. C. Market Equilibrium D. None of these are correct
23. At a given price, the amount by which quantity demanded exceeds quantity supplied; it usually forces the
price
 up.
a. Surplus B. Shortage
b. C. Market Equilibrium D. None of these are correct
24. A person who sells a merchandise or renders a service.
a. Buyer B. Laborer
b.C. Capitalist D. Seller
25. A person who purchases a merchandise or acquiring a service.
a. Buyer B. Laborer
b.C. Capitalist D. Seller
26. A local grocery store orders 200 cases of Soda Cola each week and sells them at a price of P6.00 per case. At
the end of the first week, they have only sold 160 cases. What economic situation is the grocery store facing and
what will have to happen to price in order for equilibrium to be attained?

A. surplus; price will rise. C. shortage; price will rise.

B. surplus; price will fall. D. shortage; price will fall.
27. Which of the following can lead to an increase in the supply for good X?
A. a decrease in the number of sellers of good X.
B. an increase in the price of inputs used to make good X.
C. an increase in consumers' income, assuming good X is a normal.
D. an improvement in technology used in production of good X.
28. An increase in the price of electricity will:
A. increase the demand for kerosene heaters. C. increase the demand for stereos.
B. increase the demand for light bulbs. D. increase the demand for TVs.

29. Which of the following events will cause an increase in the market demand for Ganner (a brand of beer)?
A. A decrease in the price of Ganner.
B. An increase in the price of Hyattkien (another brand of beer).
C. An increase in the price of Snappy peanuts (a complementary good).
D. An increase in income, if Ganner is an inferior good.
30. An decrease in the price of flour will:
A. decrease the demand for sugar. C. increase the price for bread.
B. increase the demand for bread. D. decrease the price for bread.
31. Which of the following is not a type of market structure? 1

A. Competitive monopoly
B. Oligopoly
C. Perfect competition
D. All of the above are types of market structures.
32. If the market demand curve for a commodity has a negative slope, then the market structure must be
A. perfect competition.
B. monopoly.
C. imperfect competition.
D. The market structure cannot be determined from the information given.
33. If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product,
unlimited long-run resource mobility, and perfect knowledge, then the firm is a:
A. a monopolist.
B. an oligopolist.
C. a perfect competitor.
D. a monopolistic competitor.
1
 34. If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous
product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is
A. a monopolist.
B. an oligopolist.
C. a perfect competitor.
D. a monopolistic competitor.
35. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product,
and unlimited long-run resource mobility, then the firm is
A. a monopolist.
B. an oligopolist.
C. a perfect competitor.
D. a monopolistic competitor.
36. If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run
resource mobility, then the firm is
A. a monopolist.
B. an oligopolist.
C. a perfect competitor.
D. a monopolistic competitor.
37. If one perfectly competitive firm increases its level of output, market supply A. will increase and market
price will fall.
B. will increase and market price will rise.
C. and market price will both remain constant.
D. will decrease and market price will rise.
38. Which of the following markets comes close to satisfying the assumptions of a perfectly competitive market
structure? A. The stock market.
B. The market for agricultural commodities such as wheat or corn.
C. The market for petroleum and natural gas.
D. All of the above come close to satisfying the assumptions of perfect competition.
39. A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to
marginal cost and price is
A. greater than average total cost.
A. less than average total cost.
B. greater than average variable cost.
C. less than average variable cost.
40. An industry with significant barriers to entry and a single supplier.
A. A. Perfect Competition C. Monopolistic Competition
B. Oligopoly D. Monopoly
41. A highly concentrated market with just a few interdependent firms.
A. Perfect Competition B. Monopolistic Competition
B. Oligopoly D. Monopoly
42. A highly competitive market with slightly differentiated products.
A. A. Perfect Competition B. Monopolistic Competition
B. Oligopoly D. Monopoly
42. A highly competitive market where firms are price takers.
A. Perfect Competition B. Monopolistic Competition
B. Oligopoly D. Monopoly
43. Which of the following is the most competitive market structure?
A. Perfect Competition B. Monopolistic Competition
B. Oligopoly D. Monopoly
44. Which of the following is the least competitive market structure?
A. Perfect Competition B. Monopolistic Competition
 B. Oligopoly D. Monopoly
45. Which of the following is NOT a feature of monopolistic competition?
A. Numerous sellers B. Product differentiation
B. Numerous buyers D. Homogenous products

46-50. As a student, how does Applied Economics work in your life situation and your family as a whole?
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