LET REVIEWER SOCIAL STUDIES – Economics 2

Social Science – Economics

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Choose the letter of the best answer.

1. What is NOT included in the three economic questions?

A. what to produce

B. how to produce

C. where to produce

D. for whom to produce

2. The philosophy that the government should take a hand's off approach to the economy.

A. Laissez-faire

B. Economies of scale

C. Capitalism

D. Law of self-interest

3. The study of how individual and business decisions interact.

A. Economics

B. Economies of scale

C. Transaction

D. Microeconomics

4. The degree of wealth and material comfort available to a person or community.

A. Economy of scale

B. Standard of living

C. Financial resource

D. Comfortability

5. The four factors of production: land, labor, capital and _________.

A. gold

B. advertisement

C. marketing

D. entrepreneurship

6. The boundary between what can and cannot be produced given the set amount of resources.

A. Circular flow model

B. Production possibilities frontier

C. Opportunity cost

D. Production gap

7. When a person or firm can produce at a lower opportunity cost than others.

A. Comparative advantage

B. Absolute advantage

C. Monopoly

D. Trade-off

8. When the price of a cup of coffee increases, some consumers opted to buy tea. We can safely say that tea is a/an __________ good.

A. complementary

B. substitute

C. alternative

D. complimentary

9. Which of the following illustrates the “law of supply”?

A. As price increases, quantity demanded decreases.

B. As quantity supplied decreases, price decreases.

C. As price increases, quantity supplied increases.

D. As quantity demanded increases, quantity supplied also increases.

10. When quantity demanded equals quantity supplied.

A. Market equilibrium

B. Break-even point

C. Law of supply and demand

D. Law of Diminishing Marginal Utility

11. When the price of rice changes, quantity demanded for rice does not change drastically. This means that rice is an example of __________ good.

A. elastic

B. inelastic

C. complementary

D. mutual

12. When the government sets a minimum price that a good or service can be sold for.

A. Price ceiling

B. Suggested Retail Price

C. Price freeze

D. Price floor

13. A tax whose percentage increases as income decreases.

A. Progressive tax

B. Regressive tax

C. Proportionate tax

D. Value Added tax

14. Because of high demand of its products, Factory ABZ employed additional 5 workers every month, while other means of production remained the same. The management noticed that over time, employing more workers did not meet the yields that they expected. This illustrates _____________.

A. Economies of scale

B. Law of Diminishing Marginal Utility

C. Law of Diminishing Marginal Return

D. Law of Supply and Demand

15. Which of the following illustrates structural unemployment? Unemployment due to ______.

A. changes in the job market

B. a change in the seasons

C. changes in the business cycle

D. people entering and exiting the job market

16. The price of a fixed basket of goods; is tracked year to year and measures inflation.

A. Gross Domestic Product

B. Balance of Trade

C. Domestic Price

D. Consumer Price Index

17. What is NOT an effect of inflation?

A. An increase in prices

B. Devaluation of the Philippine peso

C. Decrease in the Money Supply

D. An increase in salary

18. It consists of increasing and decreasing taxes and increasing and decreasing government spending to manage the economy.

A. Monetary Policy

B. Fiscal Policy

C. Economic Policy

D. Domestic Policy

19. It is characterized by a fall in Gross Domestic Product (GDP) for two consecutive quarters.

A. Inflation

B. Deflation

C. Boom

D. Recession

20. Which of the following are substitute goods?

A. coffee and milk

B. coffee and sugar

C. coffee and tea

D. coffee and creamer

ANSWERS:

1C  2A  3D  4B  5D  6B  7A  8B  9C  10A  11B  12D  13B  14C  15A  16D  17C  18B  19D  20C