COMPUTER ARTS AND TECHNOLOGICAL COLLEGE, Inc.

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MIDTERM EXAMINATION IN APPLIED ECONOMICS

Name:
SCORE:
Year/Course:

I. MULTIPLE CHOICE
DIRECTIONS: Read each question carefully, and then CHOOSE THE ANSWER that best fits the
question. Write in the space provided. ERASURE ARE CONSIDERED WRONG.

_____1. A situation wherein the amount of something available is insufficient to satisfy the desire
for it.
a. Resources b. Unlimited c. Wants d. Scarcity
_____2. The labor, capital, land and natural resources and entrepreneurship that are used to
produce goods and services.
a. Resources b. Unlimited c. Wants d. Scarcity
_____3 Deals with the economic behavior of the whole economy or its aggregate such as
government, business, unemployment, inflation and the like.
a. Microeconomics b. Macroeconomics c. Applied Economics d.
Economics
_____4. Decisions are based on traditions years and passed on and practices upheld over the
from generation to generation.
a. Traditional Economy b. Command Economy c. Market Economy d. Mixed
Economy
_____5. It is the value of the next highest valued alternative or foregone cost.
a. Tradeoffs b. Opportunity Cost c. Revenue d. Cost
Value
_____6. What two factors contribute to scarcity in the production of goods and services?
a. Unlimited resources and limited wants
b. Unlimited resources and wants
c. Unlimited wants and limited resources
d. Limited resources and wants
_____7. Oligopoly means:
a. Few Sellers, not aggressive competition. c. Homogeneous Products
b. One Seller, controls price. d. Many Sellers, differentiated product.
_____8. Perfectly Competitive means:
a. Few Sellers, not aggressive competition c. One Seller, controls price
b. Homogeneous Products d. Many Sellers, differentiated products.
_____9. It states that as price increases, quantity demand decreases; and as price decreases,
quantity demanded increases.
a. Law of Scarcity b. Law of Supply c. Law of Demand d. Natural Law
_____10. Are goods that can be used in place of another good.
a. Substitutes Goods b. Prime Goods c. Complementary Goods d. None of the
above
_____11. Are goods that go together or cannot be used without the other.
a. Substitutes Goods b. Prime Goods c. Complementary Goods d. None of the
above
_____12. Which of the following is NOT the solution to scarcity?
a. Minimizing human needs c. Allocating the resources
b. Control the increasing human wants d. Increase the resources
_____13. Which is true about supply curve?
a. As the price increases, supply decreases
b. As the price decreases, supply increases
c. As the price increases, the supply also increases
d. There is no relationship between the two.
_____14. 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 and advertising.
_____15. Which of the following statement is TRUE about the demand curve?
a. As the price increases, demand decreases
b. As the prices increases, demand also increases
c. As the price decreases, demand also decreases
d. None of the above.
_____16. Monopsony pertains to a situation where _____________?
a. There is more buyer in the market c. There is only one buyer in the
market
b. There is more seller in the market d. there is only one seller in the
market
_____17. The supply of US dollar a _____________ relationship with the exchange rate.
a. Negative b. Positive c. Indirect d. No
_____18. It means management of household.
a. Oedipus b. Scientia c. Logos d. Oikonomia
_____19. It refers to the quantities the consumers willing and able to buy at a given price.
a. Supply b. Resources c. Demand d. Labor
_____20. The quantity of goods that a seller willing to offer for sale.
a. Supply b. Resources c. Demand d. Labor
_____21. This happens when there is a state of balance when the demand is equal to supply.
a. Price b. Equilibrium c. Demand d. Labor
_____22. What is the financial compensation in exchange for labor?
a. Wage b. Capital c. Expenses d. Profit
_____23. What is the study of economic behavior and decision makings of small unit, such as
individuals, families, and business called?
a. Applied Economics b. Economics c. Microeconomics d. Macroeconomics
_____24. What is the process of producing or creating goods?
a. Distribution b. Productions c. Consumptions d. Exchange
_____25. What do you call the field that applies economic theories and principles to real-life
situations with the desired of predicting potential outcomes?
 a. Economics b. Econometrics c. Entrepreneurship d. Applied
Economics

II. IDENTIFICATION
DIRECTION: Read each statement carefully and identify what being asked. Write your answer on
the space provided in the answer sheet. Wrong spelling and erasures are considered wrong.
__________________________________26. The degree of change in demand or supply due to the
change if its determinant
__________________________________27. The main determinants of supply and demand.
__________________________________28. If the computed price elasticity is more than 1. What does it
mean?
__________________________________29. This is rivalry among various sellers in the market.
__________________________________30. It refers to an individual who attempts to organize his own
business rather than working as an employee.
__________________________________31. Is an interaction between buyers and sellers of trading or
exchange, it is also where the consumer buys and the seller sells?
__________________________________32. Is where worker offer services and look for jobs, and where
employers look for workers to hire.
__________________________________33. Is felt when a change in the price of a good changes
consumer’s real income or purchasing power, which is the capacity to buy with a given income.
__________________________________34. An agreement in which two or more persons combine their
resources in a business with a view to making profit.
__________________________________35. Is a legal entity that is separate from its owners, the
shareholders.

III. PROBLEM SOLVING

DIRECTIONS: Solve the following problem. Used another sheet or extra paper if
necessary.

36-38. Let’s assume a company reduces the price of its product from ₱ 22 to ₱ 12,
causing the quantity demanded to rise from 60 units to 88 units. Solve for the arc
elasticity and identify what type of degrees of elasticity.

39-41. Ana is a mechanical engineer who just started working at a company in New York.
Ana makes ₱200,000 in a year. As Ana lives in New York, where the living expenses are
high, she has to consume a lot of fast food. In a year, Ana consumes 770 burgers. The
following year, Ana gets a rise in income from ₱200,000 to ₱250,000. As a result, Ana
can afford more expensive food, such as dinners at Steakhouses. Therefore, Ana's
consumption of burgers drops to 400 burgers in a year. What is the income elasticity of
demand for burgers? Identify what type of degrees of elasticity.

42-45. Assume that the condo rent is ₱3500 per month and, at that price, 15,000 units
are rented. When the price increases to ₱5000 per month, 15,000 units are supplied into
the market. Solve for the supply elasticity and identify what type of degrees of elasticity.

46-50. using the demand function below, complete the demand schedule of Suki for the
Brownies. Show your solution and construct a demand curve.
Qd= 100-6P
DEMAND SCHEDULE OF SUKI FOR BROWNIES
Price per Pack Number of Brownies
₱5
10
15
20
30

BONUS QUESTION:
For Bonus points, draw the hair of VEGETA.
“You will be the best, or You’ll Be Nothing”- Vegeta, Dragon Ball Z

Ms. Catherine B. Maquiñana

Subject Teacher