ASAP!!!!

1. Scarcity in economics is based on the premise that human wants are (A) ____ while available resources are (B) ____.

a. (A) limited (B) limited c. (A) unlimited (B) limited

b. (A) limited (B) unlimited d. (A) unlimited (B) unlimited

2. The fundamental concept of Economics about resources is that resources are

C a. Equally distributed c. Scarce

b. Unequally distributed d. Unlimited

3. What will be the logical consequence(s) of a world without scarcity of resources?

D a. All prices would be zero c. Economics would no longer be a useful subject

b. Markets would be unnecessary d. All of the choices

4. What are the fundamental inputs (also called 'factors of production')?

D a. Land and labor c. Labor and capital

b. Land and capital d. Land, labor and capital

5. In economics, 'labor' as a factor of production is known as

a. Human resources c. Financial resources

b. Natural resources d. Man-made resources

6. It is an economic system in which the means of production are privately owned and operated for a profit.

A a. Capitalism c. Feudalism

b. Communism d. Socialism

7. Which of the following is not a characteristic of capitalism (i.e., market economics)?

a. Private ownership c. Government control of the economy

b. Pursuit of personal profit d. Competition and consumer sovereignty

8. Which of the following is not a characteristic of socialism (i.e., command economics)?

a. Government control of the economy c. Pursuit of collective goals

b. Collective ownership of property d. Consumer sovereignty

DEMAND & SUPPLY

9. When analyzing the impact of a variable on the economic system, the other variables

a. Must be kept constant c. Must not be taken into consideration

b. Must also be analyzed d. Are considered if the impact is material

10. The law of demand states that

a. Price and demand are directly related, ceteris paribus

b. Price and demand are inversely related, ceteris paribus

c. Price and quantity demanded are directly related, ceteris paribus

d. Price and quantity demanded are inversely related, ceteris paribus

11. A video store's business sales increased by 20% after the movie theater raised its prices from P 200.00 to P 500.00.

Thus, relative to movie theater admissions, videos are

A a. Substitute goods c. Complementary goods

b. Superior goods d. Public goods

12. X and Y are substitute products. If the price of product X increases, what is the effect on product Y?

a. Price will increase

b. Quantity supplied will increase

c. Quantity demanded will increase

d. Price, quantity demanded, and supply will increase

13. All of the following are complementary goods, EXCEPT

A a. Margarine and butter c. VCR and video cassettes

b. Razor and razor blades d. Cameras and rolls of film

14. If a rise in the price of gasoline decreases the demand for cars,

D a. Cars are an inferior good

b. Gasoline is an inferior good

c. Gasoline and cars are substitutes in consumption

d. Gasoline and cars are complements in consumption

15. A decrease in the price of a complementary good will

a. Increase the price paid for a substitute good

b. Shift the supply curve of the joint commodity to left

c. Shift the demand curve of the joint commodity to the left

d. Shift the demand curve of the joint commodity to the right

16. Which of the following would cause the demand curve for a commodity to shift to the LEFT?

a. A rise in the population

b. A rise in average household income

c. A rise in the price of a substitute product

d. A rise in the price of a complementary commodity

17. If a group of consumers decide to boycott a particular product, what is the expected result?

A a. A decrease in the demand for the product

b. An increase in the product price to make up lost revenue

c. An increase in product supply because of increases availability

d. The demand for the product would become completely inelastic

18. A decline in the price of a good causes producers to decrease the quantity of goods supplied. This result illustrates

A a. The law of supply c. A change in supply

b. The law of demand d. The nature of an inferior good

19. A supply curve illustrates the relationship between

A a. Price and quantity supplied c. Price and quantity demanded

b. Price and consumer tastes d. Supply and demand

20. According to the law of supply,

a. Producers are willing to supply larger amounts of a good as its price increases

b. A direct relationship exists between the price of a good and the amount buyers choose to buy

c. An inverse relationship exists between the price of a good and the amount buyers wish to buy

d. An inverse relationship exists between the price of a good and the amount producers supply

21. Which of the following will cause a shift in the supply curve of a product?

a. Changes in number of buyers in the market

b. Changes in consumer tastes or preferences

c. Changes in price of the product

d. Changes in production taxes

22. Which of the following is NOT likely to affect the supply of a particular good?

a. Changes in technology c. Changes in production costs

b. Changes in government subsidies d. Changes in consumer income

EQUILIBRIUM

23. The equilibrium market price of a good is the

a. Price that maximizes profit for sellers

b. Price where shortages exceed surpluses

c. Price that buyers are willing and able to pay

d. Price where the quantity demanded equals the quantity supplied

24. An improvement in technology that leads to improved worker productivity would MOST likely result in

a. A shift to the right in the supply curve and a lowering of the price of the output

b. A shift to the left in the supply curve and a lowering of the price of the output

c. An increase in the price of the output if demand is unchanged

d. Wage increase

25. In any competitive market, an equal increase in both demand and supply can be expected to always

a. Decrease both price and market-clearing quantity

b. Increase both price and market-clearing quantity

c. Increase market-clearing quantity

d. Increase price

26. If there is a decrease in both the supply and demand for a good, which of the following will definitely occur?

D a. The price of the good will increase c. The equilibrium quantity will increase

b. The price of the good will decrease d. The equilibrium quantity will decrease

27. Price ceilings

B a. Result in persistent surpluses

b. Create prices below equilibrium prices

c. Create prices greater than equilibrium prices

d. Are illustrated by government price support programs in agriculture

28. If the government regulates a product in a competitive market by setting a maximum price below the equilibrium price,

what is the long-run effect?

a. A surplus c. A decrease in demand

b. A shortage d. No effect on the market

29. Which of the following market features is likely to cause a surplus of a particular product?

B a. A monopoly c. A price ceiling

b. A price floor d. A perfect market

30. If market price is HIGHER than equilibrium price, then

a. A surplus exists, followed by an increase in price until the surplus is eliminated

b. A surplus exists, followed by a decrease in price until the surplus is eliminated

c. A shortage exists, followed by an increase in price until the shortage is eliminated

d. A shortage exists, followed by a decrease in price until the shortage is eliminated

ELASTICITY

31. The price elasticity of demand measures the responsiveness of the

a. Quantity demanded to a change in the price of the good

b. Quantity supplied to a change in the price of the good

c. Price to a change in the quantity demanded of the good

d. Price to a change in the quantity supplied of the good

32. What is the formula for the price elasticity of demand?

B a. % Quantity Demanded x % Price c. % Price x % Quantity Demanded

b. % Quantity Demanded % Price d. % Price % Quantity Demanded

33. Which elasticity coefficient (ED) shall be interpreted as UNIT-ELASTIC?

a. ED > 1 c. ED = 1

b. ED < 1 d. ED = 0

34. If the elasticity of demand coefficient for a particular product is 3.00, the good is likely

a. A luxury good c. An inferior good