1) The amount of a good or service consumers are willing to purchase at each price is called: a) Supply b) Demand c) Price d) Quantity supplied 2) The total number of units purchased at a specific price is called: a) Quantity demanded b) Demand curve c) Equilibrium d) Supply 3) The law of demand states that: a) Higher price → higher quantity demanded b) Lower price → lower quantity demanded c) Higher price → lower quantity demanded  d) Price does not affect demand 4) The law of supply says that: a) Higher price → lower quantity supplied b) Higher price → higher quantity supplied c) Price has no effect on supply d) Supply stays constant 5) The point where quantity demanded equals quantity supplied is called: a) Shortage b) Surplus c) Equilibrium d) Law of supply 6) If price is below equilibrium, what occurs? a) Surplus b) Shortage (Excess demand) ✅ c) Equilibrium d) No change 7) Ep refers to: a) Price elasticity b) Income elasticity c) Cross-price elasticity of demand d) Quantity elasticity 8) Ec stands for: a) Price elasticity b) Income elasticity c) Cross-price elasticity of demand d) Price change 9) In the notation given, Q1 stands for: a) The new quantity demanded b) The original quantity demanded c) The original price d) The new price 10) P2 means: a) The original price b) The original quantity supplied c) The new price d) The new income 11) In an economy, business entities differ from one another mainly in how they: a) Pay taxes b) Hire workers c) Allocate resources and deliver products to consumers d) Create advertisements 12) A market is best described as: a) A physical place where goods are sold b) A set of buyers and sellers who determine the price of goods and services c) A group of consumers only d) A government-regulated shop 13) Which is NOT a characteristic of pure competition? a) Homogeneous products b) Free entry and exit c) Profit maximization motive d) Difficult market entry 14) In pure competition, who dictates the price? a) The government b) Consumers c) Producers d) Investors 15) Which market structure has a single seller and no close substitutes? a) Oligopoly b) Monopolistic competition c) Monopoly d) Pure competition 16) In a monopoly, the seller: a) Has no control over price b) Is a price maker with full power to set prices c) Produces homogeneous products d) Always allows free market entry 17) Which market structure is characterized by many sellers offering close substitutes? a) Pure competition b) Monopoly c) Monopolistic competition d) Oligopoly 18) An example of monopolistic competition is: a) Aluminum and steel b) MRT transportation c) Cosmetics and garments d) Foreign exchange markets 19) Which market structure has few large firms and high barriers to entry? a) Oligopoly b) Monopoly c) Pure competition d) Monopolistic competition 20) Which is an example of an oligopoly? a) Wheat farming b) Oil and gas industry c) Local car wash d) Public transportation like MRT 21) What does PEST in PEST analysis stand for? a) Price, Equity, Sales, Trade b) Political, Economic, Social, Technological c) Profit, Earnings, Savings, Taxes d) Production, Employment, Supply, Trade 22) Which factor is NOT part of the economic issues listed in the text? a) Interest rate b) Exchange rate c) Weather forecast d) Unemployment trend 23) What happens when exchange rates fluctuate according to the text? a) They have no impact on business b) They affect the company’s ability to pay suppliers c) They lower inflation automatically d) They increase political stability 24) An increase in minimum wage can lead to: a) Lower consumer spending b) Higher growth and possible inflation c) Immediate economic depression d) Decline in workers’ spending capability 25) Which of the following is an example of a negative externality mentioned in the text? a) Free education b) Tobacco consumption c) Government subsidies d) Increase in GDP 26) Over-consumption causing global warming is classified under: a) Volatile prices b) Environmental issues c) Economic rent d) Interest rates 27) What can cause volatile prices according to the text? a) Surplus in supply b) Minimum wage increase c) Exchange rate stability d) Equal income distribution 28) High unemployment rate during a recession is often due to: a) Increase in product demand b) Fall in demand for goods c) Excess government spending d) Rising interest rates 29) Which macroeconomic issue involves prices rising faster than wages? a) Recession b) Inflation c) Volatile prices d) Economic rent 30) What is the main purpose of environmental analysis in business? a) To increase minimum wage b) To evaluate external socio-economic factors c) To limit political influence d) To fix micro-level issues only

APPLIED ECONOMICS - SUMMATIVE TEST 3 (1ST QTR)

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