b. SUPPL'F: Indicate whether a movement upward or downward along the supply curve, or a shift leftward or rightward of the supply curve of mangoes occurs for the following cases. iv. if. The surge in export demand raises prices The government imposes a price ceiling on mangoes to appease consumers who have not enough fruits last year. A new variety is developed which doubles the output per tree The current crop of mangoes is infested by fruit ies The price of pesticides against fmit flies increases clue to the 10 percent import levy. c. Describe what will happen to equilibrium price and quantity of each of the commodities given the corresponding hypothetical situations . I. iv. Coffee: the Philippine lvledical Association announces that caffeine in coffee causes heart attack. National Bookstore's Books: Management engages in a one month cutprice book sale. Rice: Government imports rice from Thailand Pork: Foot and mouth disease (FMD} hits thousands of pigs resulting in a very high mortality rate. Cigarettes: Taxes on cigarettes are increased from P2 to P3 per pack Il. Indicate what happens to the demand curve for mangoes (A. shift to the left, B. shift to the right, C. no effect) given the following situation The price of pineapple, a substitute, good increases. 2. The quantity demanded decreases. 3. There is an increase in the export for Philippines mangoes 4. Typhoon caused damaged to mangoes decreasing the supply for mangoes. 5. More people prefer mangoes to pineapples The price of mangoes increases It is the season for mangoes Income increased 9. New technology increased mango production 10. Cost of production decreasedVII. ASSIGNMENT Choose the letter of the correct answer. can also cause an upward shift in the budget line. a. Higher prices b. Higher indifference curve C. Higher utility d. Lower prices 2. The rate of substitution alo9ng the indifference curve implies a. Utility trade-off b. Commodity trade off C. Relative prices d. Relative utility of commodities 3. Another indifference curve corresponds to another level of satisfaction because of the change in . a. Budget b. Prices C. Consumption level d. Utility 4. The maximum satisfaction point of a budget line is where it is tangent to an indifference curve because a. Higher indifference curve yields more satisfaction . Budget can only buy the satisfaction of the indifference curve within it. C. The highest indifference curve within a budget line is that which is tangent to it. d. All of the above 5. Deviation from the quasi-marginal condition results in less satisfaction because of _ a. Relative prices b. Commodity trade-off C. Relative utility of commodities d. Utility trade off 6. Substitution effect results from a . a. Change in marginal utility b. Change in relative marginal utility Decrease in the marginal utility of one commodity d. Change in total satisfaction 7. There is consumer surplus when one a. Pays less for succeeding consumption . Pays less for preceding consumption C. Pays more for succeeding consumption . None of the above 8. Water is cheaper than diamond because of a. Need b. Utility in use . Utility in exchange d. Purchasing power9. The marginal rate of substitution of Product A for Product B is __ when there is more preference for the farmer. Higher b. Unchanged C. Varied d. Lower 10. The budget line when incomes increase. a. Shifts upward b. Shifts downward c. Does not change d. Varies Identify what is being described 1. Change in overall consumption due to a change in price. 2. Change in consumption mix due to a change in price. 3. Equality in the marginal utilities of a commodity item. 4. One factor that changes the consumption mix favors the commodity over another. 5. Causes total satisfaction to change. 6. It is the basis of consumption and demand behavior. 7. The proponent of Theory of Motivation, which explains the psychological factors that affect consumer behavior. 8.the psychological law that is based on subjective valuation of satisfaction. 9. Term in economics for satisfaction. 10. It depicts the combination that does nor yield any difference in satisfaction. 11. Social group that has a direct or indirect influence on one's consumer behavior. 12. Complete description of an indifference curve's shape. 13. The relationship of these two graphical illustrations tells the best combination in the consumption of times following a limited budget. 14. What MRS stands for. 15. The potential consumption of a certain tem on its market price and the income of its buyers. 16. Principles behind a consumer finding a consumption mix that will garner him the highest level of satisfaction. 17. Formula for marginal utility. 18. It is the function of the units of consumption. 19. The set of activities a person is expected to perform. 20.it is the function of the units of consumption.[Zorn nlete the table below __ __ True or False 1. Productivy is the output produced by a unit of factor in put during a given span of time. 2. The theory of production describes the functional relationships of output and economic resources, assuming these are xed sizes. 3. Improvement in productivity can be seen if the ratio of output over input increases since a unit of in put can produce more of the same out put. 4. A production function illustrates the varied combinations of inputs at the same level of plant capacity. 5. Diseconomies of scale are the negative sloping portion of a long-run average cost curve. iii. The Law of Diminishing Returns describes the tendency at some point for each succeeding addition to output to become smaller as the rm add succession units of variable input to some fixed in puts. T. An isoquant map contains infinite combinations of resource inputs that the same budget can purchase given constant prices. 3. The AP and MP of a production function may shift downward or upward only because the overall productivity level of that firm may also change. 9. Eomputers and computerized machineries are means of improving overall efciency by utilizing resource-saving technology. 1i]. Returns to scale are the indicator of plant-size change of a given business firm. 11. MRS measures the price of labor inputs over the price of capital outputs. 12. utput yielded from the last unit of input is marginal product. 13. Maximum output is otherwise known as plant capacity. 14. The quotient from dividing TP by the umber of variable in puts is average product. 15. Diseconcmies of scale are the positive sloping portion of a long-run average cost curve. Choose the letter of the correct answer. _ 1. Total product continues to increase despite a decrease in the marginal product when a. The marginal produce is already negative b. The average product continues to increase c. The resource miii chances d. The marginal product is still positive 2. The Law of diminishing Returns is due to a. Increasing resources b. Resource limitations c. Changing resource efficiency d. Changing resource mix 3. Increasing one factor input without changing the other results in a. Returns to scale b. Diminishing returns c. Hierarchy of isoquants d. Hierarchy of isocosts 4. The change in the marginal rate of substitution along the isoquant is due to a. Decreasing efficiency of additional resources b. Increasing efficiency of less resources . Increasing efficiency of additional resources d. Changing efficiency of a resource relative to another 5. A hierarchy of isoquants implies . a. Changing level of output b. Changing level of resource inputs c. Diminishing returns d. Returns to scale 6. A hierarchy of isocosts implies a. Changing budget b. Changing purchasing power c. Changing input prices d. All of the above 7. The least-cost combination is the a. Lowest budget point along the isoquant b. Lowest budget point below the isoquant C. Lowest budget point along the isocost d. None of the above 8. Cheaper labor inputs than capital inputs results in more use of the former as a least-cost. a. More labor substituted for capital b. Less capital used c. Less budget for labor input in place of capital d. More labor inputs purchased 9. If one unit of labor can buy five units of capital, how many units of labor can one unit of capital buy? a. 0.20 b. 0.50 C. 0.40 d. 0.60 10. When returns to scale are negative, average productivity . a. Increases b. Decreases c. Does not change d. Varies 11. When returns to scale are decreasing, a unit of output requires _ units of inputs. a. Moreb. Less C. The same d. Varied 12. Which of the following causes returns to scale to increase? a. Control . Communications c. Specialization d. Technology 13. Which of the following indefinitely postpones negative rate of returns? a. Technological innovations . Technological advancement C. Technology d. Continuous technological improvement 14. The use of more resources shifts the production function curve a. Diagonally and upward b. Diagonally and downward c. Diagonally and rightward d. Rightward 15. When returns to scale are decreasing, total output a. Increases b. Decreases . Does not change d. Varies IV. Match The term (column B) that best fits the phrases (Column A below. Column A Column B 1. Describe the functional relationship of input and a. Marginal product output 2. Production function b. Least-cost combination 3. Infinitesimal change c. Isocost line 4. Output yielded from the last unit of input d. isquant 5. TP divided by the number of variable inputs e. Production function 6. Refers to the declining trend to MP f . Counterproductive conditions 7. Illustrates the varied combinations of inputs at the g. Finite change same level of plant capacity 8. Contains combinations of inputs that the same h. Marginal rate of substitution budget can purchase given constant prices 9. Price of labor inputs over price of capital inputs i. Economies of scale 10. Ration between output and input j. Diseconomies of scale 11. Change in capital inputs over change in labor inputs k. Maximum output 12. Combination of resources that yields output at the I. Improved production lowest possible cost 13."same quantity" m. Isoquant map14. Any downward sloping portion of a long-run average n. Average product cost curve 15. Any upward sloping portion on the same average o. Returns to scale cost curve in #14 16. Illustrated by the TP, MP, and AP curves shifting p. Law of diminishing returns upward 17. % change in plant capacity over % change in q. Resource inputs resource input 18. An eventual result of expansion of plant size r. An infinitely small change 19. Units of increase in TP s. Theory of production 20. Measures the change between output and input as t. Productivity their levels vary in the hierarchy production functions u. utilization v. production isoquant