AECON 1Q Exam

What distinguishes economics as an applied science?

• Its focus on individual satisfaction and society’s welfare

• Its use of the scientific method of inquiry

• Its formulation of general theories through testing using past data

• Its ability to reveal practical solutions through analytical review of potential outcomes

Write your Name and your Grade and Section.

Example: Rosa S. Maputi, 12 - Mahalimuyak

Which of the following best describes the allocation process in economics?

• The decision-making process involved in producing and consuming

• The focus on individual satisfaction and society’s welfare

• The process of making general theories through testing using past data

• The study of how society creates its material wealth

What is the primary focus of economics as a social science?

• The formulation of general theories

• The observation of historical events

• The study of human interactions in a group

• The study of wealth utilization

Which of the following statements about scarcity is true?

• Scarcity can be solved by producing more goods and services.

• Scarcity is not a problem in any economic system.

• Scarcity means that wants and needs are limited.

• Scarcity only affects individuals and not countries.

Which of the following problems is NOT one of the three fundamental economic questions that every economic system faces?

• For whom shall goods and services be produced?

• How much to produce?

• How to produce?

• What to produce?

What is the first factor that should be considered when deciding what goods and services to produce?

• The availability of resources

• The desire of the people

• The level of competition in the market

• The profitability of the goods and services

Why does the supply curve slope upwards?

• At higher prices, there is a shortage of goods

• At lower prices, there is a surplus of goods

• Producers are willing to supply fewer goods at higher prices

• Producers are willing to supply more goods at higher prices

What is the relationship between the price and demand of a good, ceteris paribus, according to the law of demand?

• They are directly related

• They are inversely related

• They are positively related

• They are unrelated

What is the substitution effect in demand?

• If the price of Product A increases, the consumer will buy more of Product A instead of its substitute

• If the price of Product A increases, the consumer will look for its substitute, causing a decrease in the quantity demanded for Product A

• When the price of a product decreases, the consumer may buy more of it and less of other goods

• When the price of a product increases, the consumer may not afford to buy all the things just like before