Economics Summative Test

This is our summative test for economics parts 1-4. Please answer at your convenience

Points: 31/60

Correct 1/1 Points

1. What is the end goal of economics?

*

To satisfy the unlimited material wants of the society

To create policies for the government

To serve as a check on the resources available for consumption

To ensure that nobody gets hungry in the society

Correct 1/1 Points

2. Which of the following is the best definition of opportunity costs? *

The amount of one good that must be given up in order to produce one more unit of another good

The amount of money that must be paid in order to purchase one more unit of a good.

The amount of an input that must be used in order to produce one more unit of a good.

The price of a good that must be charged in order for a merchant to sell one more unit.

Incorrect 0/1 Points

3. Microeconomics is not concerned with: *

The quantities of each good produced

 The size of aggregate money flows in the economy

The distribution of goods among households

The allocative function of changes in relative price

Correct 1/1 Points

4. All of the following basic economic questions deal with microeconomics except: *

For whom are the goods and services produced?

What goods and services are being produced and in what quantities?

How are goods and services being produced?

Is the economy's capacity to produce goods growing over time?

Correct 1/1 Points

5. According to Walstad and Bingham, what Social Science is concerned with the use of
scarce resources to obtain the maximum satisfaction of the unlimited wants of the society?
*

economics

geography

history

scarcity

Incorrect 0/1 Points

6. What economic condition shows most things that people want are available only in very
limited supply? *
 Shortage

Scarcity

loss

all of these terms apply

Correct 1/1 Points

7. What economic resources pertains to all the natural resources found above or below the
soil that could include lands used for agricultural and industrial purposes? *

land resources

labor resources

capital

entrepreneurial abilities

Correct 1/1 Points

8. In an economy, when all economic decisions are done without government intervention,
competition served as determinant to identify the needs of the society and competition will
determine who will survive in the market, what economic system will likely be in effect in
that economy? *

mixed economy

socialism

communism

capitalism
 Correct 1/1 Points

9. Economically, what refers to a place where the buyers (consumers) and sellers (producers)
meet to agree on the procurement of goods and services? *

Market

Grocery

Talipapa

Store

Incorrect 0/1 Points

10. What is a market situation in which the market price has reached the level at which quantity
supplied equals quantity demanded? *

ceteris paribus

equilibrium

disequilibrium

Price stability

Correct 1/1 Points

11. In the Talipapa near Mr. De Leon’s house, there has been very little supply of bananas. If it
will come a time that in the next morning, a lot of people will demand for bananas and its
supply will of course be fewer than its demand, what economic situation is happening in the
Talipapa near Mr. De Leon’s house?
*

Surplus

Equilibrium
 Shortage

Panic buying

Correct 1/1 Points

12. If there has been a sudden uncontrollable increase in the price of gasoline, what price
control measure is necessary?
*

floor price

monetary policy

martial law

ceiling price

Incorrect 0/1 Points

13. From among the following goods or services, which would likely need a floor price? *

jewelries

facial service

farmer’s produces

none of the above

Correct 1/1 Points

14. MERALCO, as the only market for electricity in Metro Manila is under what kind of market
structure? *

Monopoly
 monopolistic competition

pure(perfect) competition

oligopoly

Correct 1/1 Points

15. What market structure is characterized as a structure with one unique product and few
sellers? *

monopoly

monopolistic competition

pure(perfect) competition

oligopoly

Correct 1/1 Points

16. What market structure is characterized as a structure with one unique product and many
sellers? *

Monopoly

monopolistic competition

pure(perfect) competition

oligopoly

Correct 1/1 Points

17. What market structure is characterized as a structure with many products and many
sellers? *
 Monopoly

monopolistic competition

pure(perfect) competition

Oligopoly

Incorrect 0/1 Points

18. What economic term is called as the total value of final goods and services produced during
a given period by a country’s citizens inside or outside their country? *

gross domestic product

gross national product

gross national income

national production

Correct 1/1 Points

19. Why is GDP important?

*

Because it gives an indication of how successfully society is addressing the scarcity problem

Because it shows how much the total output of a country helps in economic growth

Because it helps economists look at the performance of the different sectors of society

All of the above

Correct 1/1 Points

20. What happens when two rival firms cooperate with each other over time to raise prices
above the competitive levels through coordinated actions. *

hoarding

profiteering

collusion

cartel

Incorrect 0/1 Points

21. An agreement between two or more parties/companies, usually in an oligopoly market

structure, sometimes illegal and therefore secretive and is aimed to gaining an unfair
advantage in pricing of products though the limitation of supply. *

Hoarding

profiteering

collusion

cartel

Incorrect 0/1 Points

22. Iah, after knowing that the price of rice will increase after the storm, kept her supply of rice
in her sari-sari store, thereby creating an artificial shortage. She plans to sell her rice after
the storm for maximum profit. What illegal action was shown by Iah? *

hoarding

profiteering

collusion

cartel
 Correct 1/1 Points

23. “Ceteris paribus” literally means… *

There is shortage

There is surplus

There is equilibrium

All other things are constant

Correct 1/1 Points

24. If the price of a good increases, it is expected that… *

Demand will increase

Demand will decrease

Demand will not change

There will be 0 demand

Correct 1/1 Points

25. If the price of a good increases, it is expected that… *

Supply will increase

Supply will decrease

Supply will not change

There will be 0 supply

 Incorrect 0/1 Points

26. Changes in prices, cause… *

Movement along the Demand and Supply curves

Shifting of the demand and supply curves

Both movement and shifting of the demand and supply curves

Prices do not cause movements or shifting of the demand and supply curves

Incorrect 0/1 Points

27. Changes in non-price determinants, cause… *

Movement along the Demand and Supply curves

Shifting of the demand and supply curves

Both movement and shifting of the demand and supply curves

Non-price determinants do not cause movements or shifting of the demand and supply curves

Incorrect 0/1 Points

28. Which of the following statements is true?

*

Demand is an independent variable, and increase in price causes the demand curve to shift to the right

Demand is a dependent variable, and increase in price causes movement along the demand curve

Supply is an dependent variable, and increase in price causes the supply curve to shift to the right

Supply is a independent variable and it is not affected by the price

 Incorrect 0/1 Points

29. All of the following are true, except: *

The relationship between price and demand is negative

The relationship between price and supply is positive

The demand is inversely proportional to the price

The supply is directly proportional to the demand

Incorrect 0/1 Points

30. The gross national product is computed by what formula? *

GNP = GDP + exclusions in GDP

GNP = GDP + Net factor income from imports

GNP = GDP + Net factor income from abroad

GNP = GDP + Net factor income from exports

Correct 1/1 Points

31. Which is concerned with the behavior of the economy as a whole with respect to output,
income, price level, foreign trade, unemployment and other aggregate economic variables?
*

Microeconomics

National economics

Macroeconomics

International economics
 Correct 1/1 Points

32. Who is considered as father of modern macroeconomics? *

Adam Smith

John Maynard Keynes

David Ricardo

Alfred Marshall

Correct 1/1 Points

33. Who is considered as father of modern economics? *

Adam Smith

John Maynard Keynes

David Ricardo

Alfred Marshall

Incorrect 0/1 Points

34. What is the greatest value according to Karl Marx? *

Absolute equality

Absolute inequality

Societal decay

Societal conflict
 Correct 1/1 Points

35. Population increases relatively higher than food supply. To whose theory may we associate
this principle? *

Adam Smith

Thomas Malthus

David Ricardo

Alfred Marshall

Incorrect 0/1 Points

36. The following are metrics of the Human Development Index, except: *

Number of years of schooling

Life Expectancy

GNI per capita

GDP per capita

Incorrect 0/1 Points

37. The government lowers the taxes and tariff. This is an example of____. *

Tight fiscal policy

Loose fiscal policy

Contractionary monetary policy

Expansionary monetary policy

 Incorrect 0/1 Points

38. Prince, a Singaporean, invested his money in a Filipino company. This shows _.
*

capital market flow

international trade

foreign direct investment

balance of payment

Correct 1/1 Points

39. Teaching is an example of _____.

*

Land resource

Labor resource

Capital

Entrepreneurial ability

Incorrect 0/1 Points

40. Which of the following is a less organized market?

*

Wet market

Talipapa

Supermarket
 Online shops

Correct 1/1 Points

41. Peanut butter and bread are ____.

*

complements

substitutes

implements

competing

Incorrect 0/1 Points

42. Mia had an increase in PF in CBRC. She did not ride buses anymore. Bus ride, in this case is
an example of ______.
*

Normal good

Inferior good

Luxury good

Good for the poor

Incorrect 0/1 Points

43. Jeric’s parents are farmers. They are not poor on average, but during planting season, their
income level falls below the poverty line. Jeric’s family is experiencing ___.
*

chronic poverty

transient poverty
 extreme poverty

little poverty

Incorrect 0/1 Points

44. Is deflation good in general?

*

Yes. Because the prices drop

Yes. Because it increases the money’s buying power

No. Because it can cause layoff

No. Because deflation will eventually lead to hyperinflation

Correct 1/1 Points

45. A condition when price, demand and supply are all equal. *

disequilibrium

equilibrium

inflation

recession

Incorrect 0/1 Points

46. If the price is below the equilibrium point, there is_. *

surplus

shortage
 equilibrium

all of the above

Incorrect 0/1 Points

47. Which of the following statements is true? *

economic growth is measured by welfare

economic development is measured by the nation’s income

economic growth is measured by gross domestic product

all of the above

Incorrect 0/1 Points

48. The following are true about the real GDP, except: *

It is a reliable measure of GDP

It factors in inflation

It is based on a base year

It is based on current year prices

Incorrect 0/1 Points

49. The minimum level of income needed to satisfy needs are called __, except: *

Poverty Line

Poverty Standard

Poverty Threshold
 Poverty Limit

Incorrect 0/1 Points

50. The prices of oil are skyrocketing. What government price control measure may be
imposed? *

Price floor

Price ceiling

Fiscal Policy

Monetary Policy

Correct 1/1 Points

51. During inflation, to lessen spending and limit monetary supply, the central bank may
increase interest rates. This shows ____. *

Tight fiscal policy

Loose fiscal policy

Contractionary monetary policy

Expansionary monetary policy

Incorrect 0/1 Points

52. In what way does the central bank control commercial banks and other depository
institutions by changing the interest rate? *

Open market operations (bonds and securities)

Discount rate
 Reserve requirement (money reserve in commercial banks)

All of the above

Incorrect 0/1 Points

53. The following are benefits of foreign direct investment, except:

*

competition

employment

tax revenue

importation

Incorrect 0/1 Points

54. An ideal balance of payment is ____.

*

zero

positive (surplus)

negative (deficit)

high

Correct 1/1 Points

55. When Gross Domestic Product fell for more than two quarters, there is ___.
*

Inflation
 Recession

Depression

Economic collapse

Correct 1/1 Points

56. Which extreme inflation is characterized by slow economic growth?

*

Hyperinflation

Stagflation

Deflation

Superinflation

Incorrect 0/1 Points

57. What type of unemployment happens to people who are job hoppers?
*

frictional

cyclical

structural

underemployment

Correct 1/1 Points

58. What type of unemployment happens to people who are experiencing skill mismatch?
*
 frictional

cyclical

structural

underemployment

Correct 1/1 Points

59. How can countries increase their comparative advantage?

*

specialize goods

lower opportunity cost

provide the best package

all of the above

Correct 1/1 Points

60. As consumption increases, the marginal utility ____.

*

increases

decreases

doesn’t change

is highest

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