NATIONAL

ACHIEVEMENT TEST
REVIEW
CLUSTER 2: SOCIAL SCIENCES
APPLIED
ECONOMICS
1. It study the ways which individuals, groups, and
societies able to produce, distribute, and consume
products and services.

A. Economics C. Social Sciences

B. Politics D. Philosophy
ECONOMICS
management of limited
(scarce) resources for the
satisfaction of human
needs and wants
ECONOMICS
 It is a SOCIAL SCIENCE that
study the ways which
individuals, groups, and
societies able to produce,
distribute, and consume
products and services.
FOUR TYPES OF
ECONOMICS:
1. HOUSEHOLD ECONOMICS - the household is regarded as a
productive sector with household activities modeled as a series of
industries. In this new approach, households produce commodities
that are designed to satisfy separate wants such as thirst, hunger,
warmth, and shelter.

2. MICROECONOMICS - is the study of what is likely to happen

(tendencies) when individuals make choices in response to changes
in incentives, prices, resources, and/or methods of production.
Individual actors are often grouped into microeconomic subgroups,
such as buyers, sellers, and business owners. These groups create
the supply and demand for resources, using money and
interest rates as a pricing mechanism for coordination.
FOUR TYPES OF
ECONOMICS:
3. LOCAL/DOMESTIC ECONOMICS - refer to economic and social
systems that are part of a specific community or economic
activities within a specific local country.

4. INTERNATIONAL ECONOMICS - deals with the economic activities

of various countries and their consequences. It is a field concerned
with economic interactions of countries and effect of international
issues on the world economic activity.
2. It refers to the fundamental concept of economics that
refers to the limitation of resources.

A. Surplus C. Scarcity
B. Shortage D. Supply
 BASIC ECONOMICS CONCEPTS

A. SCARCITY
= a fundamental concept of economics that
refers to the limitation of resources.
B. UNLIMITED
HUMAN WANTS AND
NEEDS
• Needs are desired and is essential
for human survival.
• Wants are desired but not
essential for human survival.
C. ECONOMIC RESOURCES &
FACTORS OF PRODUCTION
LAND = natural resources
that exist without man’s
intervention.
• this is limited due to
conversion of farm land to
become housing project
like subdivisions, malls, gas
station etc.
 This has been an integral part of
LABOR = manpower skills economics but sometimes there are
some industry who offer contractual
or the work force that work and with low salary or wages,
transform resources into hence, it affects the production of goods
or services that result to limited
different products to meet resources in the market.
our needs.
 A man-made factor of production used to
create another product (CAPITAL).

 Another integral part of economics by which the

creation of products, services and jobs depend. The
economic status of a country plays a vital role in
international market to invite investors.
  is the factor of production that
combines land, labor and capital
to produce and create new
products.

 An individual who make

decisions in all aspects of the
production. He/she innovates
products or services by improving
the old ones.
ECONOMIC SYSTEMS
 Is characterized by the type
of institution responsible
for the management and
allocation of resources used
in the production of goods
and services.
3. When a large part of the economic system is controlled
by a centralized power, it is called?

A. Economic Systems
B. Traditional Economic System
C. Market Economic System
D. Command Economic System
4 TYPES OF
ECONOMIC
SYSTEM
 1. TRADITIONAL ECONOMIC
SYSTEM
 The traditional economic system is the most traditional
and ancient types of economies in the world. Examples of
this are Barter System and Galleon Trade.

https://www.intelligenteconomist.com/types-of-economies/
2. COMMAND ECONOMIC SYSTEM
 In a command economic system, a large
part of the economic system is controlled
by a centralized power. For example, in
the USSR most decisions were made by
the central government. This type of
economy was the core of the communist
philosophy.

https://www.intelligenteconomist.com/types-of-economies/
3. MARKET ECONOMIC
SYSTEM
 Where all economic resources
are owned by private entities
and without the intervention of
government.

• Focuses on high profit

• Produce in maximum efficiency with minimum
costs
• Distribute goods to those who can afford to buy
them
4. MIXED ECONOMIC
SYSTEM
 Economic resources are owned by
both government and private
entities with mutual benefit.

The government is also usually involved in the regulation of

private businesses. The idea behind a mixed economy was
to use the best of both worlds.

https://www.intelligenteconomist.com/types-of-economies/
 DEMAND
• Refers to the amount of goods and services
consumers are willing to purchase given a certain
price.
• If the price of the good is low, the quantity
demanded for the good is high.
Example:
- Mall Wide Sale
- Items with freebies
 POINT PRICE QUANTITY
A 80 0
B 60 100
C 40 200
D 20 300
E 0 400

The table shows the quantity of rice a consumer

is willing to buy at certain prices. As price
increases, quantity demand or the willingness to
buy a product decreases. This is known as the
LAW OF DEMAND.
4. As price increases, quantity supplied or willingness to sell
the product also increases, this applies to?

A. Law of Supply C. Law of Motion

B. Law of Demand D. Law of Supply and Demand
 SUPPLY
- Refers to the willingness of sellers to produce and
sell a good at various possible prices.
- It centers on the relationship between price and
quantity supplied.
- The price and the quantity supplied have a direct
relationship this means that if a price of a
particular good is high, the quantity supplied or
the amount that producers would be willing to sell
will also be high.
 POINT PRICE OF QUANTITY
RICE PER KILO
F 20 100
G 40 200
H 60 300
I 80 400
J 100 500

As price increases, quantity supplied (Qs) or

willingness to sell the product also increases, this
is called the LAW OF SUPPLY. The focus of the
seller is to gain more profit regardless of the
changes in price.
 LAW OF SUPPLY &
DEMAND
- The law of supply and demand describes the
economic relationship between the price of a
product, its availability and the buyers'
demand for it.
- It combines the law of supply and the law of
demand.
5. A situation where in economic forces such as supply
and demand are balanced.

A. Law of supply C. Equilibrium

B. Law of demand D. Surplus
 EQUILIBRIUM IN
ECONOMICS
- Is a state of balance in the economy.
- A situation where in economic forces such as
supply and demand are balanced.
- A perfect state of balance of market forces,
i.e., supply and demand. There are no outside
forces disrupting the balance.
6. The current situation of the high prices of onions in the
market pertains to what nature of economy?

A. Shortage C. Taxes
B. Supply D. Surplus
SURPLUS
- Is experienced when the price of a good is above
the equilibrium (balance) price.
- Occurs when there is excess supply – that is
quantity supplied is greater than quantity
demanded.
SHORTAGE
- Occurs when the quantity demanded exceeds
the quantity supplied. When a shortage exists in
the market, the consumers cannot buy as much
of the good as they would like.
- May also be experienced if government sets a
PRICE CEILING below the equilibrium price.
CONSUMPTION
- In economics, the use of goods and services
by households (consumers).
- Economists generally consider consumption to
be the final purpose of economic activity.
- Here, the products and services that the
consumers avail should fully satisfied their
needs and wants.
GOVERNMENT
7. It is perceived to be the lifeblood of the government to
be able to provide social services to its people.

A. Income Tax C. Constitution

B. Taxes D. Franchise Tax
 THE ROLE OF
GOVERNMENT IN THE
ECONOMY
The government’s primary duty is to provide social
services to its citizens like health services, free
education, and security. In order to do this, the
government needs to raise money to fund its
functions. Thus, the constitution mandates that
the government collect fees from individuals,
businesses, and the like. This process of collecting
fees is called TAXATION.
• Taxes are perceived to be the “lifeblood” of the
government, just as the constitution is its
“skeleton”.
• The “power of taxation” is an inherent power of
the state, acting through the legislature, to
impose and collect revenues to defray the
necessary governmental expenditures.

• Without taxation, the state cannot collect

revenues (products or fruits of taxation) for its
expenditures.
8. Mr. Zachary owns a house and lot located in San
Fabian, Pangasinan. He wanted to give this as a gift to Mr.
Reyes as a sign of gratitude for the help the latter bestow
to him. What tax should the government impose to the
donor of the house and lot?

A. Estate Tax C. Income Tax

B. Community Tax D. Donor’s Tax
 PHILIPPINE NATIONAL TAXES
1. Estate Tax
 Estate tax is charged to your estate or properties when the
titleholder meets their demise. At a rate of 6%, the heir
apparent or the rightful beneficiary of the estate should
settle this tax before transferring the title to the heir or
beneficiary’s name.
2. Documentary Stamp Tax
 This refers to the tax imposed on contracts, loan
agreements, certificates, and other legal papers that serve
as proof of transfer/sale of an ownership/obligation of a
property or assets.
 PHILIPPINE NATIONAL TAXES
3. Percentage Tax
 Percentage tax is a business tax imposed on merchants or
businesses that lease/sell products, services, and
properties. They are not VAT-registered, with a yearly gross
sale at a maximum of P750,000.
4. Capital Gains Tax
 Capital Gains tax refers to what an individual or a business
pays upon making profits out of selling a valuable asset.
These sold assets subjected to capital gains are pieces of
jewelry, stocks, properties, and other goods appraised
with high value.
 PHILIPPINE NATIONAL TAXES
5. Income Tax
 This refers to the tax that is imposed on an individual’s
earnings, be it salary or profits, from his/her profession,
business, trade, or properties at rates ranging from 5% to
32% depending on their income bracket.
6. Withholding Tax
 Withholding tax is the amount from an employee’s wage
deducted by the employer and directly paid to the
government for the employee’s partial income tax. 
7. Value-Added Tax or VAT 
 Value-Added Tax serves as a consumption fee that is
placed on a product when there is an additional value to
its manufacturing and final sale.
8. Excise Tax
 Excise Tax is placed on products sold in the country and
considered an indirect type of tax because this can be
recovered by the seller/producer by increasing the price of
these products.
9. Donor’s Tax
 Donor’s Tax is placed on a gift, donation, or willful free-of-
charge transfer of property between the benefactor to
recipients on their lifetime.
9. Local taxes are grounded by what republic act?

A. RA 10175 C. RA 7160
B. RA 10533 D. RA 9155
 PHILIPPINE LOCAL TAXES

 Local taxes are grounded on the Republic Act 7160, also

known as the Local Government Code of 1991. These taxes
and fees, on the other hand, are levied by the local
government units (provincial, city, municipality, and
barangay).
 PHILIPPINE LOCAL TAXES
1. Franchise Tax 
 This refers to the tax imposed on franchise businesses at a
maximum rate of 50% of the 1% of the gross yearly
receipts for the preceding year.
2. Basic Real Property Tax 
 Basic Real Property Tax covers six types of properties:
agricultural, commercial, industrial, mineral, residential,
timberland.
 PHILIPPINE LOCAL TAXES
3. Sand, Gravel and other Quarry Resources Tax
 A maximum of 10% of fair market value in the location per
cubic meter of quarry resources (such as gravel, sand,
common stones, earth, and sand prized from public lands
or waters) will be collected by LGUs.
4. Business of Printing and Publication Tax
 These taxes are also collected from publication or printing
of books, posters, pamphlets, cards, tarps, and other print
materials.
 PHILIPPINE LOCAL TAXES
5. Annual Fixed Tax for Delivery Trucks and Vans 
 Local government units collect P500 every year from
delivery vehicles such as trucks and vans handling
products (beverages, food, cosmetics, tobacco, etcetera).
6. Professional Tax
 This type of tax applies to individuals whose professions
require examination from the government, such as board
exams or licensure. These professionals include lawyers,
doctors, engineers, architects and others subjected to this
tax.
 PHILIPPINE LOCAL TAXES
7. Amusement Tax
 Films, theatrical plays, concerts and all forms of
entertainment shows are subjected to tax. It is commonly
added to the admission price or the entrance tickets.
8. Community Tax 
 Community tax is a tax for the public where one must pay
an amount depending on your income bracket. The base
fee is P5 and it has an additional increase of P1 for each
P1,000 of income.
10. Cardo has a micro-business enterprise that earns less
than Php 50,000.00, what tax should Cardo need to pay?

A. Business Permit C. Barangay Tax

B. Mayor’s Permit D. Sanitary Tax
 PHILIPPINE LOCAL TAXES
9. Barangay Tax
 Micro-businesses such as retailers and “sari-sari stores”
that earn a gross sale of P50,000 every year have to pay
the barangay tax. The tax will start to accumulate from the
very first day of the first month of each year.
10. Barangay Clearance
 This certification from the barangay serves as legal proof of
permission to conduct an activity or start a business in a
particular barangay. It is also used as a documentary
requirement on government transactions and employment.
TRIAL TEST
ANSWER KEY
1.D 6. C
2.B 7. A
3.A 8. C
4.C 9. A
5.C 10. D