APPLIED ECONOMICS

MIDTERM EXAMINATION

NAME: _________________________________________________ SCORE: _____________

GRD&SEC.:_____________________________________________ DATE: ______________
TEACHER: _____________________________________________

STRICTLY NO ERASURE

I. MULTIPLE CHOICE. Read each item carefully and choose your answer from the
options given. Write your answer BEFORE the number of each item. Should the answer be
absent from the choices, please write E.

1. A scientific study which deals with how individuals and society in general makes
choices.
a. Scarcity b. Applied Economics c. Economics d. Social Sciences
2. It defined as the limited nature of society’s resources.
a. Scarcity b. Applied Economics c. Economics d. Social Sciences
3. The application of economic theory to determine the likely outcomes associated with
various possible courses of action in the real world.
a. Scarcity b. Applied Economics c. Economics d. Social Sciences
4. Also called “human resources”, refers to all human efforts, be it mental or physical, that
help to produce satisfying goods and services. It covers manual workers like construction
workers, machine operators, and production workers, as well as professionals like nurses,
lawyers, and doctors.
a. Land b. Labor c. Capital d. Entrepreneurship
5. A factor of production similar to labor as one of the crucial elements in creating goods
and services.
a. Land b. Labor c. Capital d. Entrepreneurship
6. Examines and revises the fundamental assumptions of economics.
a. Land b. Labor c. Capital d. Entrepreneurship
7. The system must determine the desires of the people. Goods and services must be based
on the needs of the consumers.
a. What to produce? c. How to produce?
b. For whom to produce? d. All of these.
8. The study of how households and firms make decisions and how they interact in markets.
a. Microeconomics c. Macroeconomics
b. Econometrics d. Applied Economics
9. The application of statistical and mathematical theories to economics for the purpose of
testing hypotheses and forecasting future trends.
a. Microeconomics c. Macroeconomics
b. Econometrics d. Applied Economics
10. The study of economy wide phenomena dealing with economics behavior of the whole
economy or its aggregates such as the government and businesses.
a. Microeconomics c. Macroeconomics
b. Econometrics d. Applied Economics
11. Refers to proper utilization of economic goods. However, goods and services could not
be utilized unless you pay for it.
a. Production b. Distributions c. Exchange d. Consumption
12. Pertains to activities of the government regarding taxation, borrowings, and expenditures.
a. Production b. Distributions c. Exchange d. Consumption
13. Refers to marketing of goods and services to different economic outlets for allocation to
individual consumers. In monetary terms, this is the allocation of income among persons
in the household.
a. Production b. Distributions c. Exchange d. Consumption
14. Refers to process of producing or creating goods needed by the households to satisfy their
wants and need.
a. Production b. Distributions c. Exchange d. Consumption
 15. Refers to the quantity of goods that a seller is willing to offer for sale.
a. Demand b. Land c. Supply d. Labor Supply
16. It is the loss of potential gain from other alternatives when alternative is chosen.
a. Opportunity Cost c. Trade-Offs
b. Scarcity d. Choice
17. These decisions involve picking one thing over all the other possibilities.
a. Opportunity Cost c. Trade-Offs
b. Scarcity d. Choice
18. Which best describes Economics as a social and an applied science?
a. the study of things we need to survive
b. the study of how people make choices when they are faced with an unlimited supply
of resources
c. the study of human behavior
d. the study of how people make choices when they are faced
19. Refers to the severe deprivation of basic human needs which include food, safe drinking
water, sanitation facilities, health, shelter, education and information.
a. Poverty b. Unemployment c. Absolute Poverty d. Underemployment
20. Refers to the portion of the labor force who is willing to engage in productive activities
yet fails to do so.
a. Poverty b. Unemployment c. Absolute Poverty d. Underemployment
21. Sustained and continual increase in the prices of goods and services.
a. Poverty b. Unemployment c. Absolute Poverty d. Underemployment
22. Which of the following is NOT a resource?
a. Capital b. Labor c. Land d. Money
23. GDP total market value of the goods and services produced by a country's economy
during a specified period of time. GDP is an acronym for?
a. Gross Domestic Product c. Gross Demand Product
b. Green Domestic Product d. Gross Domestic Production
24. The amount of a good that buyers are willing and able to purchase.
a. Quantity Supplied b. Quantity Demanded c. Shortage d. Surplus
25. A situation in which quantity demanded is greater than quantity supplied.
a. Quantity Supplied b. Quantity Demanded c. Shortage d. Surplus
26. A situation in which quantity supplied is greater than quantity demanded.
a. Quantity Supplied b. Quantity Demanded c. Shortage d. Surplus
27. A graphical representation shows the relationship between the price of the product sold
other factor of production and the quantity supplied per period.
a. Quantity Supplied b. Quantity Demanded c. Shortage d. Surplus
28. Use to determine how changes in product demand and supply related to changes in
consumer income or the producer price.

29. The result is equal to 1 (𝑬𝒅 = 𝟏), which means that the spending changes are
a. Elasticity b. Elastic Demand c. Inelastic d. Unitary Elastic

proportionate with price changes.

a. Elasticity b. Elastic Demand c. Inelastic d. Unitary Elastic
30. If 1 percent change in price results in a 3 percent change in the quantity of the product
that is supplied, the supply of that product is ______________.
a. Elastic b. Inelastic c. Perfectly elastic d. Perfectly Inelastic
II. IDENTIFICATION. Read each statement carefully. Identify what is being asked. Write
your answer on the space provided before each number. WRITE LEGIBLY-MEANING
ALL CAPS.

_____________________________ 31. Signify that all relevant variables, except those being
studied at the moment, are held constant.
_____________________________ 32. This refers to the marketing of goods and services to
different economic outlets for allocation to individual consumers.
_____________________________ 33. Deals on the application of economic theories and
principles to real-world situations with the desired aim to analytically review potential outcomes.
_____________________________ 34. The physical space on which production takes place.
_____________________________ 35. Scientific study which deals with how individuals and
society in general makes choices.
_____________________________ 36. The unemployment which exists in any economy due to
people being in the process of moving from one job to another.
_____________________________ 37. Occurs when people are unemployed at particular times
of the year when demand for labor is lower than usual.
_____________________________ 38. Unemployment above or below the natural rate of
employment, meaning it is tied to the state of the economy.
_____________________________ 39. Occurs when there are fundamental changes to the
economy that change the demand of services.
_____________________________ 40. The rate of increase in prices over a given period of
time.
_____________________________ 41. The result is infinite (𝑬𝒅 = ∞), which means that a
change in price leads to an unlimited change in the quantity demanded.
_____________________________ 42. The result is greater than 1 (𝑬𝒅 > 𝟏), which means that
spending is relatively priced sensitive.
_____________________________ 43. The result is equal to zero (𝑬𝒅 = 𝟎), which means that
quantity demanded/supplied remains the same when price increases or decreases.
_____________________________ 44. The result is equal to 1 (𝑬𝒅 = 𝟏), which means that the
spending changes are proportionate with price changes.
_____________________________ 45. The result is equal to 1 (𝑬𝒅 = 𝟏), which means that the
spending changes are proportionate with price changes.
III. PROBLEM SOLVING. Read the information below and write your solution inside the
box.
46-50. The price of face mask before COVID 19 is P4.00 at retail, leads to the total sales daily of
3,000 pieces among all markets in the province of Camarines Norte. Because of the COVID-19
pandemic, the new price for a face mask implemented. It goes up to P25, which leads to the total
sales of 33,000 pieces. What is the response of quantity sold to the change in the price of face
masks?
SOLUTION:

EXPLANATION:

50-55. Suppose that the price of rice increase from P35 to P40 per kilo that encouraged the
farmers to produce more “palay” from 126,0000 to 180,000 sacks per semester.
SOLUTION:
 EXPLANATION:

56-65. Complete the following Elasticity Point using the arc or midpoint formula and determine
if your answer is INELASTIC, ELASTIC, or UNITARY ELASTICITY
PRICE QUANTITY DEMANDED
A 2 70
B 5 55
C 7 45
D 9 35
E 14 10

56-57. Point B and C

Qd1= 55 Qd2= 45 P1= 5 P2=7
SOLUTION:

58-59. Point A and D

Qd1= 70 Qd2= 35 P1= 2 P2= 9
SOLUTION:

60-61. Point C and E

Qd1= 45 Qd2= 10 P1= 7 P2= 14
SOLUTION:
62-63. Point B and D
Qd1= 55 Qd2= 35 P1= 5 P2= 9
SOLUTION:

64-65. Point A and E

Qd1= 70 Qd2=10 P1= 2 P2=14
SOLUTION:

IV. ENUMERATION. Enumerate the following information needed in each item. Write
your answer on the space provided for. WRITE LEGIBLY-MEANING ALL CAPS.

Types of Unemployment

65. _____________________________________________
66. _____________________________________________
67. _____________________________________________
68. _____________________________________________

Two Branches of Economics

69. _____________________________________________
70. _____________________________________________

Non-Price Determinants of Demands

71. _____________________________________________
72. _____________________________________________
73. _____________________________________________
74. _____________________________________________
75. _____________________________________________

Non-Price Determinants of Supply

76. _____________________________________________
77. _____________________________________________
78. _____________________________________________
79. _____________________________________________
80. _____________________________________________