MASTERY TEST: ECON B

1. A branch of economics that deals with the whole or aggregate economy such as inflation, GDP, and unemployment rate.

a. Consumers
b. Microeconomics
c. GNP
d. Macroeconomics

d. Macroeconomics

2. A way of approximating the cost of storage is through

a. cyclical price variation
b. seasonal change in prices
c. long term changes in prices
d. random change in prices

b. seasonal change in prices

3. All available resources should be employed and fully utilized

a. Economic Freedom
b. Price Stability
c. Full employment

c. Full employment

4. Also known as the Agriculture and Fisheries Modernization Act

a. RA 8345
b. RA 8543
c. RA 8453
d. RA 8435

d. RA 8435

5. Assurance of fulfilment of economic needs of every member of society.

a. Economic growth
b. Economic Security
c. Economic Freedom
d. Price stability

b. Economic Security

6. At this point, transaction occurs between the traders and the consumers and where retail price is established

a. Point of production
b. Wholesale point
c. Point of consumption
d. Farm gate

c. Point of consumption

7. By definition, labor force is

a. Population of 18 years old to 60 years old that contributes to production of goods and services
b. Population of 17 years old to 640 years old that contributes to production of goods and services
c. Population of 15 years old to 64 years old that contributes to production of goods and services
d. Population of 15 years old to 60 years old that contributes to production of goods and services

c. Population of 15 years old to 64 years old that contributes to production of goods and services

8. Economics is derived from Greek word that mean household management

a. Ekonomikia
b. Oikonomia
c. Economiko
d. Eikonomia

b. Oikonomia

9. Economics that makes statements on “what is” or “what will happen”, unbiased, tackles cause and effect, and facts.

a. Normative economics
b. Microeconomics
c. Positive economics
d. Macroeconomics

c. Positive economics

10. Economics that makes statements on “what should be” or “what ought to be” and value judgments.

a. Microeconomics
b. Positive economics
c. Normative economics
d. Macroeconomics

c. Normative economics

11. Economies of scale, capital requirement, government rules and regulations and inherent technical relationships in the industry are dimensions of

a. seller concentration
b. product differentiation
c. barrier to entry
d. market conduct

c. barrier to entry

12. GDP at current prices and uses prices of the year is called

a. GDP per capita
b. GNP
c. Real GDP
d. Nominal GDP

d. Nominal GDP

13. Generally, this refers to the measurement of indicators of national output or income like GDP and GNP.

a. Income Tax
b. Personal Consumption
c. Final Goods
d. National Income Accounting

d. National Income Accounting

14. Goods which are not purchased for producing other goods or for resale to avoid double counting.

a. Supplementary goods
b. Intermediate goods
c. Complementary goods
d. Final goods

d. Final goods

15. Grading and standardization can result to economic efficiency since it

a. increases the level of competition in the market
b. limits the time and expense of bargaining about price and quality for each transaction
c. increases the meaningfulness of price quotations
d. only a and b

d. only a and b

16. He formulated the Principles of Political Economy and Taxation

a. David Ricardo
b. John Stuart Mill
c. Thomas Malthus
d. Adam Smith

a. David Ricardo

17. If the economy is operating inside the production possibilities frontier, the

a. The resources are not fully utilized in production
b. The economy cannot produce more of one good without giving up more of the other good
c. All the resources are used efficiently
d. The economy experienced technical change

a. The resources are not fully utilized in production

18. If the Marginal Propensity to Consume 0.9,

a. The household save 0.5 cents of each additional peso of disposable income
b. The household save 0.9 cents of each additional peso of disposable income
c. The households spent 0.9 cents of each additional peso of disposable income
d. The households spent 0.1 cents of each additional peso of disposable income

c. The households spent 0.9 cents of each additional peso of disposable income

19. In economics, the value of the best forgone alternative is called

a. Opportunity cost
b. Diminishing return
c. Consumption
d. Utility

a. Opportunity cost

20. In this type of taxation, the taxpayer receiving a lower income shoulders the heavier tax burden

a. Regressive tax
b. Progressive tax
c. Tax burden
d. Proportional tax

a. Regressive tax

21. Income tax is an example of

a. Fiscal policy
b. Consumption
c. Direct tax
d. Indirect tax

c. Direct tax

22. Inflation due to the increasing costs of production on the part of the producers.

a. Seasonal inflation
b. Cost-push inflation
c. Demand-pull inflation
d. Seasonal deflation

b. Cost-push inflation

23. It answers the economic problem of who gets to consume the product of economic activity.

a. How to produce?
b. How much to produce?
c. What to produce?
d. For whom to produce?

d. For whom to produce?

24. It is an economic problem that refers to the types of good and services that the society desires.

a. How much to produce?
b. For whom to produce?
c. What to produce?
d. How to produce?

c. What to produce?

25. It is generally profitable to store products when

a. The demand is elastic
b. There is a short crop for grain products that will be used as feed
c. There is a short crop for perishable price-inelastic products
d. none of the these

c. There is a short crop for perishable price-inelastic products

26. It occurs when prices are observable declining over time.

a. Deflation
b. Taxation
c. Unemployment
d. Inflation

a. Deflation

27. It pertains to the techniques employed in production

a. What to produce?
b. For whom to produce?
c. How much to produce?
d. How to produce?

d. How to produce?

28. Measures the rate by which domestic price of an input or output faced by producers deviates from the world or border price

a. nominal protection
b. Government protection
c. effective protection state
d. Implicit tariff

d. Implicit tariff

29. Monetary policy refers to government policies related to:

a. Money supply, credit and interest rates
b. Investments
c. Government expenditures and taxation
d. wages and prices

a. Money supply, credit and interest rates

30. Money without intrinsic value that is used as money because of government decree

a. Peso note
b. Commodity money
c. Check
d. Fiat money

d. Fiat money

31. Part of labor force that had no job or work during the basic survey reference period

a. Unemployed
b. Employed
c. Underemployed
d. Consumer

a. Unemployed

32. Price will tend to rise in response to

a. an increase in income with no change in supply
b. a sharp decrease in population with no change in supply
c. none of the these

a. an increase in income with no change in supply

33. Prices established in organized markets approximate equilibrium prices when

a. number of transaction is large
b. there are few buyers and sellers
c. there is government intervention
d. there are no market information

a. number of transaction is large

34. Proportion of unemployed persons to the total labor force.

a. Employment rate
b. Inflation rate
c. Underemployment
d. Unemployment rate

d. Unemployment rate

35. Proportions of employed persons to the total labor force

a. Unemployment rate
b. Employment rate
c. Consumption
d. Investment

b. Employment rate

36. Refers to decreasing rate of inflation- the general level of prices is increasing at decreasing rate

a. Disinflation
b. Inflation
c. Unemployment
d. Deflation

a. Disinflation

37. The absence of central economic plan is one of the features in this type of economy.

a. Capitalism
b. Fascism
c. Communism
d. Socialism

a. Capitalism

38. The amount by which consumption increases when disposable income increases by one unit.

a. Law of Diminishing Returns
b. Investment
c. Marginal Propensity to Consume
d. Law of Diminishing Marginal Utility

c. Marginal Propensity to Consume

39. The annual rate of change or year-on-year change in Consumer Price Index

a. Underemployment
b. Employment rate
c. Unemployment rate
d. Inflation rate

d. Inflation rate

40. The definition of economics is based on the facts that

a. Consumers maximize their satisfaction while produces maximize their profit
b. Resources are scarce
c. Income is limited while available goods and services to buy is limited
d. Resources are scarce while the human wants are unlimited

d. Resources are scarce while the human wants are unlimited

41. The economic resources are described as

a. Unlimited
b. Free
c. Scarce
d. Expensive

c. Scarce

42. The factors of production are owned by the government

a. Capitalism
b. Socialism
c. Communism
d. Fascism

c. Communism

43. The father of the modern economics

a. David Ricardo
b. John Stuart Mill
c. Thomas Malthus
d. Adam Smith

d. Adam Smith

44. The market value of all final goods and services produced by all nationals in the economy during a given period of time.

a. Taxation
b. Income
c. GDP
d. GNP

d. GNP

45. The market value of all final goods and services produced within the boundaries of the Philippines, whether by Filipinos or foreign-supplied resources.

a. GDP
b. GNP
c. Income
d. Taxation

a. GDP

46. The most important risk involved in the storage of food products

a. insect and rodent damage
b. physical loss.
c. price changes

c. price changes

47. The policy of the government with regard to the level of government purchases, level of transfers, and the tax structures.

a. Monetary policy
b. Fiscal policy
c. Agricultural policy
d. Agricultural related laws

a. Monetary policy

48. The replacement of foreign production which domestic production

a. protective effect
b. redistribution effect
c. government revenue
d. import substitution

d. import substitution

49. The set of assets in an economy that people regularly use to buy goods and services

a. Labor
b. Economic resources
c. Money
d. Gold

c. Money

50. This approach to GDP computations is equal to the sum of expenditures on final goods.

a. Income approach
b. Value-added approach
c. Commodity approach
d. Expenditure approach

d. Expenditure approach

51. This is a useful tool for illustrating the choices available to society and its constraints, and gives all the possible combinations of maximum amounts of two goods and services that can be produced with a given amount of resources

a. Ceteris paribus
b. Law of diminishing returns
c. Economic model
d. Production possibilities frontier

d. Production possibilities frontier

52. This type of economic goal aimed for an equitable distribution of wealth and income.

a. Equity
b. Full employment
c. Economic growth
d. Efficiency

a. Equity

53. Type of economics that applies the principles of economics to crop and animal production.

a. Agricultural economics
b. Marketing
c. Macroeconomics
d. Microeconomics

a. Agricultural economics

54. Type of inflation that occurs when consumer suddenly demand some products thereby allowing producers to increase prices to maximize their profits.

a. Seasonal inflation
b. Demand-pull inflation
c. Cost-push inflation

b. Demand-pull inflation

55. Type of taxation which all pay the same percentage of their income in taxes.

a. Proportional tax
b. Regressive tax
c. Progressive tax
d. Tax burden

a. Proportional tax

56. Type of unemployment that caused by the time it takes workers to search for a job.

a. Seasonal unemployment
b. Structural unemployment
c. Frictional unemployment
d. Cyclical unemployment

c. Frictional unemployment

57. Unemployment caused by changes in business cycle

a. Frictional unemployment
b. Structural unemployment
c. Cyclical unemployment
d. Seasonal unemployment

c. Cyclical unemployment

58. When an economy undergoes basic structural changes like trends towards traditional agriculture to modern industry, this type of unemployment occurs.

a. Seasonal unemployment
b. Frictional unemployment
c. Structural unemployment
d. Cyclical unemployment

c. Structural unemployment

59. When dealing with economic situation, the assumption ceteris paribus means

a. all variables are independent
b. that rational self-interest is being assumed
c. that no other assumptions are being made
d. all other things equal

d. all other things equal

60. When the assessment on the rich is greater than those of the poor, the kind of taxation employed is

a. Tax burden
b. Regressive tax
c. Progressive tax
d. Proportional tax

c. Progressive tax