Directions. Read the test items carefully and encircle the letter of your choice that best answers the statement 1. There is scarcity of resources because: A. Man's wants are unlimited C. Man's wants are enough D. Man's wants are satisfied (B) Man's wants are limited 2. An economic resource that includes the natural resources: C. Capital Land B. Labor D. Entrepreneur 3. Economics is a social science because it deals with: (A) Human nature C. Experimentation B. Natural resources D. Plants and animal 4. Another term used for equilibrium: A. Stable C. Balance D. None of the above B. Static 5. It is a finished product which is used to produce other goods: C. Capital A. Land B. Labor D. Entrepreneur 6. It reflects the desire of the consumer for a commodity: C. Market (A) Demand B. Supply D. Supply schedule 7. In a market equilibrium, a higher price will result to: C. Constant supply (A) Shortage D. Constant demand B. Surplus 8. Which of the following is true? A. The supplies of inputs used affect the supply of a good. B. The lower the price of the good, the smaller the quantity that will be offered by the supplier. C. The lower the price of the good, the bigger the quantity that will be demanded by the buyer. D. All the above are true. 9. The economic problems are answered predominantly through the price mechanism and modified through government intervention: A. Traditional system C. Market system B. Command system D. Mixed system 10. The economic problem that refers to the nature of goods and services the economy should produce: A. What to produce C. How much to produce B. How to produce D. For whom to produce 11. The market equilibrium for a commodity is determined by: A. The market demand for the commodity B. The market supply of the commodity C. The balancing forces of the demand and supply of the commodity D. Any of these 12. If the cost of production of pork increases, supply will: C. remain constant A. Increase D. It depends B. Decrease 13. The following statements are correct except: A. Authority to tax is inherent to every state. B. Taxes are compulsory contributions to support the state. C. Overseas workers cannot be taxed for his income earned in abroad. D. Taxation regulates the flow of income in an economic system. 14. A market structure that implies an ideal situation for the buyers and sellers C. Monopolistic competition A. Perfect competition D. Oligopoly B. Monopoly 15. The biggest source of government funds: C. Permits A. Taxes D. Revenues B. Fines