NORTHERN CHRISIAN COLLEGE

The Institution for Better Life

FINAL EXAMINATION
Soc Sc 2 (Principles of Economics with Agrarian Reform & Taxation)
S.Y. 2019-2020

Name:_______________________________________________________Score:____________

I. Multiple Choice. Analyze the following statements carefully. Select the best answer from the given
choices. Encircle the letter of the best answer.

1. How does the ability-to-pay tax theory suggest how taxpayers should pay taxes?
A. According to the services they use. C. Because the government says so.
B. According to how much they earn. D. Because is is their duty to do so.
2. Which of the following best defines efficiency?
A. Absolute fairness C. Minimim waste
B. Equal distribution D. Consumer sovereignty
3. Economists use the word equity to describe a situation in which.
A. Each member of society has the same income
B. Society is getting the most it can from its scarce resources
C. Those in society who have the least will receive the most
D. The benefits of society’s resources are distributed fairly among society’s members
4. What is the total expenditure in an economy on goods and services by individuals or nation during a
given period of time?
A. Production B. Consumption C. Services D. GDP
5. It is refers to the relationship between savings and income?
A. Circular function C. Savings function
B. Income function D. Withdrawal function
6. What you give up to obtain an item is called your
A. Opportunity cost B. Explicit cost C.True cost D. Direct cost
7. Which of the following is the best statement about markets?
A. Markets are usually a good way to organize economic activity
B. Markets arre usually inferior to central planning as a way to organize economic activity
C. Markets fail and are therefore not an acceptable way to organize economic activity
D. Markets are good way to organize economic activity in develope nations, but not in less
8. In a market economy, economic activity is guided by
A. The government B. Central planners C.Corporations D. Prices
9. Prices direct economic activity in a market economy by
A. Influencing the actions of buyers and sellers
B. Reducing scarcity of the goods and services produced
C. Eliminatng the need for government intervention
D. Allocating goods and services prodice in the most equitable way
10. Economics is the study of
A. how society manages its scarce resources.
B. the government’s role in society.
C. how a market system functions.
D. how to increase production.
11. In the Philippines, higher income tax rates on rich people could be justified on the basis of
A. Market efficiency
B. The lack of other sources of government revenue
C. Equity for society
D. Government bias against the wealthy
12. The primary determinant of a country’s standard of living is
A. The ability to reduce foreign competition
B. Its ability to produce goods and services
C. The total suppply of money in the economy
D. The average age of the country’s labor force
13. It is an economic system wherein the business can be owned by a private individuals with slight
restriction of the government intervention. What is this?
A. Absolute capitalist C. Communism
B. Capitalist D. Mixed economic
14. Suppose that the average income of a Phillipines is higher than the average income of Indonesia .
You might conclude that?
A. South African firms are faced with stricter government regulations than Philippine firms
B. Total income is divided among fewer workers in Philippine since it has a smaller labor force than
Indonesia.
 C. Philippines’ climate allows for longer growing seasons and therefore Philippines can produce
large quantities of grain
D. Productivity in Philippines is higher than in Indonesia
15. A worker in Bangladesh can earn 1 dollar per day making cotton cloth on a hand loom. A worker in
the United States can earn 100 dollars per day making cotton cloth wih a mechanical loom. What
accounts for the difference in wages?
A. U.S. textile workers belong to a union
B. There is littele demand for cotton cloth in Bangladesh and great demand in the U.S.
C. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom
D. Bangladesh has low-wage policy to make its textile industry more competitive in world markets
16. Both households and societies face many decisions because
A. resources are scarce.
B. populations may increase or decrease over time.
C. wages for households and therefore society 8uctuate with business cycles.
D. people, by nature, tend to disagree.
17. Inflation is defined as
A. A period of rising productivity in the economy
B. A period of rising the invome in the economy
C. An increase in the overall level of output in the economy
D. An increase in the overall level of prices in the economy
18. Inflation causes
A. Incomes to fall
B. Productivity to increase
C. The government to lower taxes
D. The value of money to fall
19. Which of the following is the most correct statement about the relationship between inflation and
unemployment?
A. Inthe short run, reducing inflation is associated with the falling unemployment
B. In the short run, reducing inflation is associated with rising unemployment
C. In the long r un, reducing inflation associated with falling unemployment
D. In the long run, reducing inflation is associated with rising unemployment
20. Which of the following would NOT be included in consumption?
A. Monthly rent and utilities
B. Consulting services purchased in a city acrross the country
C. A new car purchase
D. Toothpaste purchase
21. What is a form of business organization owned and operated by two or more persons?
A. CorporationB. Partnership C. Company D. Sole proprietor
22. How many percent of the harvest will go to the person who shouldered the expenses for planting,
harvesting and for the work animals in Republic Act No. 34?
A. 70% B.20% C.50% D. 80%
23. What firm owned by a group of people who have a common objective and who collectively bear the
risks of the enterprse and share its profits?
A. Cooperatives B. Partnership C. Company D. Corporation
24. Suppose that the average income of a Kenyan is higher than the average income of a South African.
You might conclude that
A. South African are faced with stricter government regulations than Kenyan
B. total income is divided among fewer workers in Kenya since it has a smaller labor force than
South Africa.
C. Kenya’s climate allows for longer growing seasons and therefore Kenya can produce large
quantities of grain.
D. productivity in Kenya is higher than in South Africa
25. Of the following are the major forms of business organization
I. Sole propritorship III. Business trust
II. Partnership IV. Corporaions
A. I & II only B. III-IV-I C. I-II-IV D. II & IV only
26. This occures when a person works either part-timme or full-time but which in both cases receive
very little pay.
A. Unemployment B. Depriciation C. Undemployment D. Lack of skills
27. ______ is a very important resource and it is very critical in the development of the economy?
A. Labor B.Land C. Capital D. Entrepreneur
28. It refers to the introduction of new products. What is this?
A. Profit B. Expectations C. Innovation D. Creativit
29. What are the two features of a capitalistic economy that need to be understood?
A. Business cycles and inflation C. Circular and flow
B. Labor and employment D. Bussiness and firms
30. Labor is perishable” this means?
A. Labor is dynamic characteristics of economic activity
 B. Labor that is wasted is lost forever
C. Labor is no joke that can never be subtitute
D. Labor is the answer of all questions
31. It is a set or group of people having the same basic conditions of production, exchange, distribution
and consumption.
A. Organization B. Alliance C. Alliance D. Sector
32. It refers to the creation of goods and services.
A. Production B. Exchange C. Consumption D. Distribution
33. It is considered as the most important factor in production
A. Machines and technology C. Investment and capital
B. People and their labor-power D. None of the above
34. It refers to the utility or usefullness of consuming a good or service
A. Use value B.Exchange Value C. Good value D. Bad Value
35. The standard by which a product, service or labor-power is exchanged.
A. Use value B. Exchange Value C. Bad Value D. Good Value

II. Essay – Explain brief and concise (5 pts each )

1. How could developing domestic agriculture, building Filipino industry, and promoting the rigts
and welfare of the majority of Filipinos be possible?

2. Which is more important to a country: natural resources or skills possessed by its people? Reason
out your answer.

The End!!!
God Bless!!!

Prepared by: Noted by:

Sandrex A. Agbayani, LPT Prof. Joyce C. Castillo I