1. Trade-off is .
   1. allowing the government and other organizations to choose for us
   2. sacrificing one thing for another
   3. deciding who consumes the products produced in an economy
   4. holding other variables fixed
2. Entrepreneurs play a key role in which type of economy?
   1. centrally planned economy
   2. market economy
   3. command economy
   4. all of the above
3. Macroeconomics is best described as the study of .
   1. very large issues
   2. the choices made by individual households, firms, and governments
   3. the relationship between inflation and wage inequality
   4. the nation's economy as a whole
4. Mothelesi quit his job as a salesman where he made P35,000 per year to start his own t-shirt making business. His business expenses are P6,000 per year on rent, P12,000 per year on supplies, and P4,000 per year on part time help. As for his personal expenses, his apartment costs him P4,800 per year and his personal bills are an extra P1,200 per year. What is Mothelesi's opportunity cost of running the business?

A. P63,000

B. P57,000

C. P41,000

D. P35,000

5 An economy in which government bureaucracy decides how much of a good to produce, how to produce the good, and who gets the good is known as a

1. mixed economy
2. centrally planned economy
3. laissez-faire economy
4. market economy

6. In considering the relationships between price and quantity demanded, " ceteris paribus" directs the economist to assume that

A. price increases affect quantity

B. quantity increases affect prices

C. either price nor quantity affect demand

D. all other variables remain unchanged

7. Suppose that a market for a product is in equilibrium at a price of P5 per unit. At any price below P5 per unit .

A. there will be an excess demand for the product

B. there will be an excess supply of the product

C. the quantity supplied of the product will be greater than the quantity demanded of that product

D. there will be a surplus of that product

8. At a price of P20, a store can sell 24 picture frames a day. If the price falls to P18, the store can sell 36 picture frames a day. Using the initial-value method, the price elasticity of demand is .

A. 0.2

B. 9.0

C. 5.0

D. 1.5

9. Gross Domestic Product (GDP) is the sum of the market value of the

A. intermediate goods produced over a specified period

B. services produced over a specified period

C. normal goods produced over a specified period

D. final goods and services produced over a specified period.

10. To avoid double counting in the calculation of the final value of GDP (Gross Domestic Product) which of the following should be excluded?

A. Net investment

B. Government purchases

C. The value of intermediate goods

D. Exports of final goods

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