Lyceum of the Philippines University

Preliminary Examination
ECON01A- Principles of Economics with Land Reform and Taxation
Prof. NESTOR C. VELASCO
1. The term economics is derived from the word
a. Oeconomicus
b. Okonomikos
c. Ekonomiks
2. This term was coined by
a. Alfred Marshall
b. Adam Smith
c. Xenophon
3. He defined economics as the science of wealth
a. Tina Brown
b. Alfred Marshall
c. Adam Smith
4. He defined economics as the science of material welfare
a. Adam Smith
b. Lionel Robbins
c. Alfred Marshall
5. The quantities of physical goods consumed by the people
a. Wealth
b. Material welfare
c. Economic goods
6. He defined economics as the science of the scarcity of resources and which
choice of best alternative is used
a. Lionel Robbins
b. Alfred Marshall
c. Adam Smith
7. The branch of economics that deals with human behavior and choices as they
relate to relatively small units such as an individual, a firm, an industry or a
single market
a. Microeconomics
b. Macroeconomics
c. Positive Economics
8. The branch of economics that deals with human behavior and choices as they
relate to an entire economy
a. Normative Economics b. Microeconomics
c. Macroeconomics
9. This economics category predicts the consequences of alternative actions by
answering the question What is? or What will be?
a. Positive Economics
b. Normative Economics c. Microeconomics
10.This economics category answers the question What ought to be? and it
deals heavily on value judgments
a. Macroeconomics
b. Positive Economics
c. Normative
Economics
11.The creation of a good or service or the addition of utility
a. Production
b. Distribution
c.
Consumption
12.Does not refer only to real estate but any resources found whether in fluvial,
terrestrial and even aerial
a. Capital
b. Labor
c. Land
13.It includes the time, physical and mental efforts exerted by individuals or
groups involved in the production process
a. Labor
b. Land
c. Capital
14.Man-made resources used as tools or machineries to produce a good or
service
a. Land
b. Capital
c. Labor
15.The act of organizing and assuming the risks and rewards of a business
venture
a. Enterprise
b. Entrepreneurship
c. Both A
and B
16.The effort of the entrepreneur is being rewarded by a ______
a. Wage
b. Profit
c. Interest
17.Out of land, we obtain _____ as a type of payment

a. Interest
b. Wage
c. Rent
18.Out of capital, _____ is obtained as a type of payment
a. Rent
b. Interest
c. Wage
19.Out of labor, we obtain _____ as a type of payment
a. Wage
b. Profit
c. Interest
20.In this economic problem, every level in our society must decide what s and
product or service to produce and most likely decides the best combination
of goods and services to meet the needs or wants without sacrificing utility
a. How to produce?
b. What to produce?
c. For whom
to produce?
21.This economic problem refers to the method or means of producing the
product or service
a. For whom to produce? b. How to produce?
c. What to produce?
22.It focuses on the problem of distributing the products?
a. What to produce?
b. For whom to produce? c. How to produce?
23.The organizations and methods used to determine what goods are produced,
how they produced, and for whom they are produced?
a. Traditional Economy b. Mixed Economy
c. Economic System
24.An economic system which combines in itself the features of capitalism and
socialism
a. Command Economy
b. Market Economy
c. Mixed Economy
25.Where decisions are made based on what is accustomed of
a. Mixed Economy
b. Market Economy
c. Command Economy
26.The government controls solely most means of production, distribution of
resources and decides what goods or services be provided for all people or to
selected few
a. Traditional Economy b. Command Economy
c. Market Economy
27.Synonymous to Capitalism, this system heavily relies on what is happening in
the market
a. Market Economy
b. Traditional Economy
c. Command
Economy
28. A relationship between two variables: the price of a particular goods and the
quantity of goods that consumers are willing to buy at that price during a
specific period
a. Quantity Demanded b. Law of Demand
c. Demand
29.Regarded as the economic rule that governs the behavior of consumers as
they purchase goods and services in varying prices
a. Law of Demand
b. Demand
c. Quantity Demanded
30.The amount of a product that people are willing and able to purchase at a
specific price
a. Demand
b. Quantity Demanded
c. Law of Demand
31.This shows the relationship between the quantity of goods demanded and the
price of the goods
a. Demand Curve
b. Change in Demand
c. Demand
Schedule
32.Which of the following is a non-price determinant of demand?
a. Income
b. Tastes and Preferences c. Both A and B
33.The maximum units or quantity of goods and services producers can offer to
the market

a. Supply Schedule
b. Law of Supply
c. Supply
34.States that at a higher price, the quantity supplied increases
a. Supply
b. Quantity Supplied
c. Law of Supply
35.Which of the following is not a non-price determinant of supply?
a. Population size
b. Cost of production
c. Technology
Classification: Determine if the following falls underA. Positive Economics
B. Normative Economics
36.The United States of America has the moral obligation to help the Philippines
37.The unemployment rate of the Philippines is 6.1% as of April, 2016
38.The minimum daily wage in Metro Manila is higher than that of Metro Davao
39.The existing tax system of the Philippines is unfair
40.Additional 50 pesos in our allowance increases our purchasing power
Complete the Table:
Point
Price
Qd
Qs
Qs-Qd
State of
Market
A
5
100
60
41.
46.
B
10
90
70
42.
47.
C
15
80
80
43.
48.
D
20
70
90
44.
49.
E
25
60
100
45.
50.
Choices:
41-45 (Qs-Qd)
A. 0
B. -40
C. +40
D. -20
E. +20
46-50 (State of the Market)
A. Shortage
B. Surplus
C. Equilibrium