PRINCIPLES OF ECONOMICS

Francisco Gil N. Garcia, Ph. D.

University of Southern Mindanao
An economic system characterized by public
ownership of property resources and collective
determination of economic decisions through central
planning is

a. Socialism
b. Communism
c. Capitalism
d. Fascism
Macroeconomics is not concerned with

a. The level of output of goods and

services
b. The general level of prices
c. Growth of income
d. Individual income
The market equilibrium point for a
commodity is determined by

a. The market demand

b. The market supply
c. The balancing forces of demand
and supply
d. Any of the above
 Which of the following is also known as RA 7394
which protects consumers against hazard to health
and safety, unfair sales and the like?

1. Toxic Substance and Nuclear

Waster Control Act
2. Consumer Act of the
Philippines
3. Retail Trade Liberalization
Act
4. None of the above
 The exclusive right of an inventor for the
control of his invention for a period of some
say, 17 years is called

1. patent
2. royalty
3. monopoly
4. franchise
Protection against imitators or copycats
is known as

1. intellectual property rights

2. copyrights
3. patent fee
4. SEC registration
Increasing returns to scale means that

1. A doubling of all inputs cause a

doubling of output
2. A doubling of all inputs would cause
output to more than double
3. A doubling of all inputs would cause
output to less than doubling of
output
4. Doubling only one output while other
inputs remain fixed would cause a
doubling of output.
Which of the following is not a basic principle
guiding the cooperative movement:

1. open membership
2. democratic control
3. unlimited interest to capital
4. patronage refund
The resource market is where

a. household sell products and

businesses buy products.
b. businesses sell the resources and
household buy products.
c. household sells resources and
businesses buy resources.
d. businesses sell resources and
households buy resources.
Which of the following will be determined in
the product market?

a. manager’s salary
b. the price of equipment used in a
manufacturing firm
c. the price of a 30-hectare
farmland
d. the price of a new pair of
leather shoes
In this circular flow diagram:

a. Money flows counterclockwise

b. Resources flow counter
clockwise
c. Goods and services flow
clockwise
d. Households are on the supply
side of the product market
In the same diagram:

a. households spend income in the

product market
b. firms supply resources to the
household
c. household receive income
through the product market.
d. households produce goods
At market equilibrium

a. quantity demanded equals

quantity supplied
b. demand and supply curves
intersect
c. the quantity sellers are willing
to sell and consumers are
willing to purchase are the same
d. all of the above
An increase in demand and a decrease in
supply of commodity will cause the
equilibrium to

a. increase
b. decrease
c. remain the same
d. we can not say
If the percentage change in the quantity
demanded is greater than the percentage fall
in its price, the coefficient of price elasticity is

a. less than one

b. greater than 1
c. equal to 1
d. zero
An indifference curve illustrates

a. constant quantities of one good with

varying quantities of another
b. all combinations of two goods that
can be purchased for a given sum of
money
c. all combinations of two goods that
will have the same level of
satisfaction
d. all of the above
e. none of the above
The locus of points each of which represents a
bundle of goods that can be purchased if the
entire money income is spent is called

a. budget line
b. indifference curve
c. isoquant
d. supply curve
The most economical stage of production
is

a. Stage I
b. Stage II
c. Stage III
d. None of the above
Which of the following best describes
the production function

a. It indicates the best output to

produce
b. It relates physical inputs to physical
outputs
c. It relates peso inputs to peso
outputs
d. It indicates the best way to combine
factors to produce any given product
The law which states that if one kind of an
input is increased and added in equal amount
to some fixed number

a. It indicates the best output to

produce
b. It relates physical inputs to physical
outputs
c. It relates peso inputs to peso
outputs
d. It indicates the best way to combine
factors to produce any given product
Thank You