SOCIAL SCIENCE 112 (BASIC ECONOMICS W/ TAXATION & LAND REFORM)

Test 1: Answer the following question below and write the capital letter of the correct answer in
your blue book. If the question requires explanation then explain it based on the
direction.
1. In the definition below of Economics, what is not a definition of it?
a. Economics is the study of scarcity.
b. Economics is a social science study that only determines the needs and wants of consumers.
c. Economics is a social science study that deals with the distribution, consumption and production
of goods and services.
d. Economics is the study of limited resources of consumers.

Money,
Costs
Resource Market Income
Resources Factors of
Production
Businessess Circular Flow Diagram Household
Goods & Goods &
Revenue Services Services Consumption
& Expenditure

Product Market

2. In the illustration above, what sector demands and consumed for supply?
a. Businesses b. Resource Market c. Product Market d. Household
3. What sector supply or produce the quantity demanded of the consumer?
a. Businesses b. Resource Market c. Product Market d. Household
4. It is the type of market that produces the raw materials.
a. Businesses b. Resource Market c. Product Market d. Household
5. It is the type of market that produces the intermediate goods/processed goods.
a. Businesses b. Resource Market c. Product Market d. Household
6. What are the factors of production?
a. Capital, Labor, Land, Business c. Capital, Labor, Land, Entrepreneur
b. Capital, Labor, Land, Purchase d. Capital, Cash, Land, Entrepreneur
7. In the Philippine market today, the needs of the population center to the production of corn instead of
rice. What economic question does the production of rice answered to?
a. What to produce? c. How to produce?
b. How much to produce? d. For whom to produce?
8. The Philippine market is what type of economy?
a. Market b. Command c. Mixed d. Traditional
9. What type of market is strictly commanded by Monarchs and is based on tradition?
a. Businesses b. Resource Market c. Product Market d. Household
10. It is the utility for goods and services?
a. Demand b. Demand Curve c. Supply d. Supply Curve
11. It is the total amount of a product available for purchase in the market?
a. Demand b. Demand Curve c. Supply d. Supply Curve
12. For 5 points, explain in three sentences only the law of demand. Less or more than the required
sentence will be a point deduction.
13. Banana peel is now the trend slipper trademark in the market, even though, it is expensive, most buyer
bought the product. What happen to the demand curve?
a. Shift to the right c. Movement along the curve
b. Shift to the left d. None
14. Filipino do not eat rice on breakfast because of the introduction of cornflakes. What happen to the
demand curve if rice is being substituted with cornflakes?
a. Shift to the right c. Movement along the curve
b. Shift to the left d. None
15. For 5 points, explain in three sentences only the law of supply. Less or more than the required sentence
will be a point deduction.
16. After Yolanda hits Region VIII, what happen to the supply curve?
a. Shift to the right c. Movement along the curve
b. Shift to the left d. None
17. As observed in Naval, many bakery has been established. If Sophia is one of the Bakery, their income
decreases. What happened to the supply curve?
a. Shift to the right c. Movement along the curve
b. Shift to the left d. None
 18. For 5 points, illustrate in a graphical form the given written on
Given: the left side.
P Q1 Q2
100 12 45 19. Q1 is a supply curve because it is upward sloping.
80 14 42 a. True b. Falsec. Both d. None
60 25 40 20. Q2 is a supply curve because it is downward sloping.
40 30 30 a. True b. Falsec. Both d. None
20 35 25 21. The equilibrium point are the ______.
10 40 14 a. P-40, Q-25 c. P-20, Q-30
5 45 12 b. P -40, Q-30 d. P-60, Q-30
1 50 5
22. If there is an excess in supply but the buyers demand decreased, surplus happened.
a. True b. Falsec. Both d. None
23. If there is an increase in demand but supply is lacking, shortage happened.
a. True b. Falsec. Both d. None
24. For 5 points, graphically illustrate and identify the equilibrium, shortage, & surplus of the above given.
25. It is the degree of responsiveness to the changes of the determinants.
a. Elasticity b. Price Elasticity c. Arc Elasticity d. None
26. Types of elasticity are the following:
a. Price Elasticity, Point Elasticity, Arc Elasticity
b. Point Elasticity, Income Elasticity, Cross Elasticity
c. Price Elasticity, Point Elasticity, Cross Elasticity
d. Price Elasticity, Income Elasticity, Cross Elasticity
27. _________ elasticity is the changes of price and the quantity demanded can lead to more or less than 1
or equal to 1.
a. Price b. Income c. Cross d. None
Product:
Cornstarch 28. For 5 points, compute the price elasticity of the following given
P Q using Epp.
30 120 29. For 5 points, compute the price elasticity of the following given
45 150 using Epa.
30. Elasticity principle state that ________________.
a. If it is more than 1, then it is elastic. C. Both a and b
b. If it is less than 1, then it is inelastic d. None
31. Upon solving for the Point and Arc Elasticity in the given above the changes of price and quantity
demanded indicates that cornstarch is an ____________ product.
a. Elastic b. Inelastic c. Equal d. None
32. Who formulated Engel’s law?
a. Ernest Engel b. Ernesto Engel c. Ernst Engel d. None
33. Engel’s law states that _____________________.
a. When income increases all needs can be bought by the households.
b. When income increases, quantity demanded increases.
c. When income increases, all wants decreases.
d. When income increases, all households decrease food expenses.
34. Cross Elasticity: Commodity, Income elasticity: ___________
a. Price b. Income c. Cross d. None
35. Why does household purchase luxury items when income increase?
a. Because household now can afford to buy luxury items.
b. Because household will not eat anymore.
c. Because household will produce the luxury item.
d. All of the Above
36. It is the responsiveness of the changes in commodity.
a. Price b. Income c. Cross d. None
37. For 5 Points, Compute the cross elasticity of the following
Product: Original New
Crumbs given on the table.
P Q P Q
X 30 120 25 150 38. With your computation, the product crumbs is _____.
Y 40 25 35 50 a. Elastic b. Inelastic c. Equal d. None

39. What type of commodity is x based on your computation?