CITY COLLEGE OF TAGAYTAY

Akle St., Brgy. Kaybagal South, Tagaytay City

SCHOOL OF EDUCATION
______________________________________________________________________________________

MIDTERM EXAMINATION
(MAJOR EXAMINATION)
2nd Semester, SY 2020-2021

SOCS 36/ MICROECONOMICS

(COURSE CODE & TITLE)

Name ____________________________Year/Section ___________________ Score _______________

Direction: MULTIPLE CHOICE. Choose the best answer from the given choices.
1. When demand increases, the demand curve shifts
A. along a demand curve. B. down and to the left C. to the right and upward D. counter-clockwise.
2. According to the law of demand, consumers will purchase more of a good when the
A. market price of the good rises. B. income rises C. market price of the good falls. D. related price of a good decreases.
3. Which of the following influences buying plans of a consumer that causes a movement along a demand curve?
A. Income B. Price of the good C. Prices of related good D. All of the above
4. Which of the following pairs of goods are most likely substitutes?
A. milk and sugar B. DSLR and lens C. lemonade and iced tea D. tablet and smartphone
5. People come to expect that the price of a liter of gasoline will rise next week. What’s the effect?
A. This week’s demand rises B. This week’s demand falls C. Next week’s demand rises. D. This week’s supply falls.
6. Many Filipinos have decreased their consumption of pork and switched to chicken meat in the belief that eating chicken instead of pork lowers
cholesterol. The determinant of demand that is considered in the statement is
A. consumer’s expectation B. price of a complement C. income. D. tastes.
7. If a rise in the price of Good A decreases the demand for Good B, then
A. Good A and Good B are complements in consumption. B. Good A and Good B are substitutes in consumption.
C. Good A and Good B are both inferior goods. D. Good A is an inferior good and Good B is a normal good.
8. If a good is an inferior good, then the demand for that good decreases when the
A. number of buyers increases. B. price of a substitute rises C. price of the good increases. D. income increases.
9. Which of the following will shift the demand curve of onions to the right?
A. The price of onion per kilo decreases. B. The income of a customer who buys onions goes up.
C. The price of a substitute good for onions decreases. D. The price of a complement good for onions decreases.
10. Assuming spaghetti (Good A) and pancit palabok (Good B) are substitutes, a decrease in the price of spaghetti will cause the
demand curve for pancit palabok to
A. shift to the left as consumers switch from good A to good B B. shift to the right as consumers switch from good A to good B
C. move leftward as consumers switch from good A to good B D. move rightward as consumers switch from good A to good B
11. If a good is an inferior good, then the demand for that good decreases when the
A. number of buyers increases. B. price of a substitute rises C. price of the good increases. D. income increases.
12. Which of the following will shift the demand curve of onions to the right?
A. The price of onion per kilo decreases B. The income of a customer who buys onions goes up.
C. The price of a substitute good for onions decreases. D. The price of a complement good for onions decreases.
13. Assuming spaghetti (Good A) and pancit palabok (Good B) are substitutes, a decrease in the price of spaghetti will cause the
demand curve for pancit palabok to
A. shift to the left as consumers switch from good A to good B. B. shift to the right as consumers switch from good A to good B
C. move leftward as consumers switch from good A to good B. D. move rightward as consumers switch from good A to good B
14. Inverse relationship between price and quantity demanded.
A. Law of demand B. Demand curve C. Demand schedule D. Ceteris paribus
15. Graph that shows relationship between price and quantity demanded.
A. Law of demand B. Demand curve C. Demand schedule D. Ceteris paribus
16. All other things being equal or held constant.
A. Law of demand B. Demand curve C. Demand schedule D. Ceteris paribus
17. Reflects various quantities of a good at various prices on a table.
A. Law of demand B. Demand curve C. Demand schedule D. Ceteris paribus
18. Amount of good that a buyer is willing to buy at a certain price.
A. Demand B. Demand curve C. Demand schedule D. Ceteris paribus
19. Private individuals own most, if not all, the resources and control their use. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
20. A society produces what best ensures its survival. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
21. People are largely free to do what they want with the resources at their disposal. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
22. Government makes all economic decisions. _________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
23. Individual choice and voluntary exchange direct economic decisions. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
24. The government decides what goods and services will be produced, how they will be produced, and how they will be distributed. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
25. People make economic decisions based on customs and beliefs that have been handed down from generation to generation. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
 CITY COLLEGE OF TAGAYTAY
Akle St., Brgy. Kaybagal South, Tagaytay City
SCHOOL OF EDUCATION
______________________________________________________________________________________

26. This involves a degree of private economic freedom mixed with a degree of government regulation of markets. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
27. The prices of goods and services are determined in a free price system. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
28. This is characterized by the public ownership of resources and centralized planning. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
29. Voluntary choices based on rational self-interest are made in unrestricted markets to answer the questions what, how, and for whom.
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
30. Resources are allocated according to long-lived practices from the past. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
31. The major and strategic industries are owned and managed by the state while the minor industries belong to the private sector. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
32. There is no free competition because the government is the only seller. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
33. There is competition and the opportunity to make large profits, greater efficiency, and innovation. ___________
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional
34. There is competition and the opportunity to make large profits, greater efficiency and innovation.
A. Market Economy B. Command Economy C. Mixed Economy D. Traditional

Choose the appropriate word or phrase that completes each statement. Refer to the circular flow diagram below to answer the following.

35. Households receive income from businesses through the __________

A. FACTOR PAYMENT B. CONSUMPTION SPENDING C. REVENUE D. COST OF PRODUCTION
36. In this circular flow diagram, money income and consumption expenditure flow __________
A. CLOCKWISE B. COUNTERCLOCKWISE C. UPWARD D. DOWNWARD
37. In the product market, ___________ combine resources to produce and sell goods and services.
A. PRODUCT MARKET B. HOUSEHOLD C. FIRM D. RESOURCE MARKET
38. In the resource market, households provide the____________ that firms use to produce goods and services.
A. ECONOMIC RESOURCES B. LAND, LABOR AND CAPITAL C. FACTOR PAYMENT D. GOODS AND SERVICES
39. Households sell labor to the resource market and receive factor payment in the form of ____________.
A. RENT, WAGE, INTEREST B. LAND, LABOR AND CAPITAL C. GOODS AND SERVICES D. REVENUE

Among the four diagrams below, choose what graph represents each of the following changes. Choose the letter of choice after the statement.

40. When the price of a substitute rises, demand for the original good decreases. D
41. When tastes change in favor of a good, demand for the good increases. C
42. When the price is expected to fall in the future, demand for the good decreases today. D
43. When the price of a good rises, quantity demanded decreases. B
44. When the income is expected to rise in the future, demand for the good increases today. C
45. When income is expected to fall in future, demand for the good decreases today. D
 CITY COLLEGE OF TAGAYTAY
Akle St., Brgy. Kaybagal South, Tagaytay City
SCHOOL OF EDUCATION
______________________________________________________________________________________
46. A hypothesis is a suggested answer to a problem by the aid of which we endeavor to explain facts by discovering their orderliness. The
hypothesis arises from the observed facts, experience or previous knowledge of the researcher.
A. TRUE B. FALSE
47. If a theory is proved to be wrong, it stands rejected. But it is a gross error to suppose that a theory which is rejected is useless. Rather, a wrong
theory may direct our attention to unsuspected facts or new facts and lead to the amendment of the theory.
A. TRUE B. FALSE
48. Economic theory provides us with tools of economic analysis, helps in explaining economic phenomena, in predicting economic events, in
judging the performance of the economy, and in formulating economic policies.
A. TRUE B. FALSE
49. Economic theory helps in interpreting and explaining economic phenomena of the real world.
A. TRUE B. FALSE
50. For economic policy to be successful, it has to be formulated on the basis of economic theories. It is the knowledge of economic theories that
leads to the laying down of economic policies.
A. TRUE B. FALSE
51. It is the role of the economist not only to analyse the consequences of a proposed policy (or to compare two or more policies), but also to
suggest policies.
A. TRUE B. FALSE
52. Economic tools are applicable to all economic systems whether they are capitalist, socialist or mixed. They also apply to developed and
developing economies.
A. TRUE B. FALSE
53. The first step in the formulation of a theory is the selection of the problem which must be stated clearly and correctly.
A. TRUE B. FALSE
54. Economic theory involves generalizations which are statements of general tendencies or uniformities of relationships among various elements of
economic phenomena.
A. TRUE B. FALSE
55. According to Descartes, “Theories without facts may be barren, but facts without theories are meaningless.”
A. TRUE B. FALSE
56. Theoretical knowledge is based on facts. And facts based on verified hypotheses are raised to the status of a law.
A. TRUE B. FALSE
57. “We seek, by the use of theory, to explain, understand and predict phenomena in the real world, and our theory must therefore be related to, and
tested by, empirical observation of the world around us.”
A. TRUE B. FALSE
58. Ernest Nagel defines an economic theory “as a set of statements, organized in a characteristic way, and designed to serve as partial premises
for explaining as well as predicting an indeterminately large (and usually varied) class of economic phenomena”.
A. TRUE B. FALSE
59. To Explain Economic Phenomena is a function of Economic theory.
A. TRUE B. FALSE
60. Economic theory is used to Formulate and Understand Economic Policies.
A. TRUE B. FALSE

Prepared by:

AMPARO CHRISTINE RECON-PANGANIBAN

Instructor, SOCS36

Date Submitted:
MAY 2021

Approved by:

DR. LOPITA U. JUNG

Dean, School of Education