Applied Economics Quiz #1

Economics is considered a social science because it:

• studies natural processes

• focuses only on money.

• analyzes human behavior in decision-making.

• creates scientific inventions.

The basic economic problem that asks “Who will benefit from goods and services?” is:

• What to produce

• How to produce

• For whom to produce

• Why to produce

When the supply of a product is high and demand is low, the price usually:

• increases

• remains the same

• decreases

• is not affected

Which of the following best illustrates applied economics?

• Reading about supply and demand

• Using economic theories to solve real-world problems

• Memorizing economic formulas

• Learning the history of economic thought

OFWs help the economy by:

• sending remittances to the Philippines

• starting foreign wars

• increasing exports

• applying for loans abroad

A situation where there are too many workers but not enough jobs may cause:

• higher salaries

• economic growth

• improved working conditions

• lower wages

A weakening peso means:

• imports become cheaper

• exports are more expensive

• OFWs receive less in pesos

• imported goods become more expensive

A government policy that increases the minimum wage may result in:

• fewer jobs offered by small businesses

• lower income for workers

• cheaper goods in the market

• less demand for labor

What happens when interest rates go up?

• More people borrow money

• Business investments increase

• People are encouraged to save

• There is more money in circulation

Which is an example of a contemporary issue faced by Filipino entrepreneurs?

• Government loans

• Unlimited labor

• High rental costs

• Free public education