I. Identifcation.

Write the word or words best describe the

sentence.
1. This Greek word means household or one who manages household.
2. He was the British economist who wrote the book, The General Theory of
Employment, nterest and !oney.
". He was the #cottish moral philosopher and the pioneer of political economy who
populari$ed the economic concept of %in&isible hand'
(. This refers to the limited nature of society)s resources.
*. They are the ones that produce goods and ser&ices using inputs, such as labor, land
and capital.
+. This refers to the ,atin phrase which literally means, %all other things being e-ual'.
.. This answers the -uestion, %how much is the wanted product or ser&ice/'
0. This refers to the study of how societies use scarce resources to produce &aluable
commodities and distribute them among di1erent people with &arious needs.
2. This refers to a &isual model of the economy that shows how money 3ows through
markers among household 4rms.
15. They are the ones who own the factors of production and consume all the goods and
ser&ices that 4rms produce.
11. This refers to the e6tent to which goods and ser&ices are preferred by consumers.
12. This refers to the increment in the utility or the added satisfaction upon consuming
another amount of the same good.
1". This law states that we will get less e6tra output when we add additional doses of an
input while holding other inputs 46ed.
1(. This form of market structure e6ists when a single 4rm is the sole producer of a
product for which there are no close substitutes.
1*. This refers to an agreement in which two or more persons combine their resources in
a business with a &iew to make a pro4t.
1+. This measure to the total market &alue of all 4nal goods and ser&ices produced by
permanent residents of a nation within a gi&en period of time.
1.. 7nder this phase of business cycle, employees prefer to set aside some wages and
reduce their consumption.
10. This refers to the lower turning point of a business cycle, where a contraction turns
into an e6pansion.
12. This refers to a speed8up in the pace of economic acti&ity.
25. This refers to a fall in the general le&el of prices.
II. Modifed True or false. Write TRUE if the statement is
correct and write the word/s that would make the sentence
correct.
1. 9erfect competition is rare in the real world, but the model is important because it
helps analyse industries with characteristics similar to pure competition.
2. #tock refers to the share of ownership in a corporation.
". :oluntary unemployment occurs when workers are mo&ing between ;obs, careers and
locations.
(. n limited partnership. <ll member share the management of the business and each
is personally liable for the debts and obligations of the business.
*. n&isible underemployed workers are those who work for less than (5 hours a week
+. =et E6ports refer to the income of >?@s less income of Transnational Aorporations.
.. !i6ed ncome refers to the combination of wages, salaries, and pro4ts of the self8
employed indi&iduals.
0. !oney refers to anything that ser&es as a commonly accepted medium of e6change
or means of payment.
2. ?iscal policy pertains to the control o&er the money supply in the circulation.
15. <ccording to the acceleration principle, the stock of capital depends on the le&el of
income or production.
11. E6ports refer to goods and ser&ices that are produced abroad and sold domestically.
12. < charge is an in&oluntary fee le&ied on corporations or indi&iduals that is enforced
by a le&el of go&ernment in order to 4nance go&ernment acti&ities.
1". ,and reform refers to any e1ort, on the part of the go&ernment, to sol&e the problems
of low producti&ity, landless tenants and po&erty among the tillers of the soil
1(. ,and distribution refers to the program of granting certi4cates of titles to farmer for
the land they are tilling.
1*. <grarian reform program is designed to bring about impro&ements in all the
institutions surrounding farm life and other group measures necessary to make the
work of the tenant, farm worker and owner8culti&ator a success.
III. Enumeration
Enumerate what is being asked by the following statements.
1. Gi&e the 4&e B*C determinants of demand
2. Gi&e the 4&e B*C determinants of supply
". Gi&e the 4&e B*C ad&antages of corporations
(. Gi&e the 4&e B*C factors that should be considered in computing G=9 under the
e6penditure approach.
IV. Essay. <nswer the -uestionDstatement in not more than *
sentences.
1. Ee4ne and discuss the concepts of globali$ation and free market policy.
2. Eiscuss the main functions of ta6ation.
". Ei1erentiate land reform from agrarian reform.
I. Identifcation ! "oint each# a total of $% "oints&
1. >ikonimia
2. Fohn !aynard Geynes
". <dam #mith
(. #carcity
*. ?irms
+. Aeteris paribus
.. 9rice
0. Economics
2. Aircular 3ow of economy model
15. Household
11. 7tility
12. !arginal utility
1". ,aw of Eiminishing Heturns
1(. !onopoly
1*. 9artnership
1+. Gross domestic product
1.. Aontraction
10. Trough
12. E6pansion
25. Ee3ation
II. Modifed true or false $ "oints each# '% "oints&
1. True
2. True
". ?rictional unemployment
(. General partnership
*. :isible
+. =et factor income from abroad
.. True
0. True
2. !onetary policy
15. True
11. mports
12. Ta6
1". <grarian reform
1(. True
1*. True
III. Enumeration ! "oint each# $% "oints&
1. a. price
b. price of inputs
c. taste le&el of desire of the buyer
towards the goodDser&ice
d. future technology
e. technology
2. a. price
b. input price
c. technology
d. future e6pectations
e. go&ernment policies
". a. easy to raise funds
b. limited liability
c. unlimited life
d. speciali$ed management
e. risk are shared
(. a. personal consumption
e6penditure
b. gross pri&ate domestic
in&estment plus stock building
c. go&ernment purchases of goods
and ser&ices
d. net e6ports
e. net factor income from abroad
IV. Essay '% "oints&
1. Globali$ation refers to the increasing interconnectedness of people and places as a
result of ad&ances in transport, communication, and information technologies that
cause political, economic and cultural con&ergence. @hile, free market policy refers
to a policy whereby the go&ernment does not inter&ene in trading between nations
by tari1s, -uotas, or other means.
2. He&enue I ta6es raise money to spend on roads, schools and hospitals, and on more
indirect go&ernment functions like market regulation or ;ustice systems.
Hedistribution I this means transferring wealth from the richer section of society to
poorer sections. This function is widely accepted in most democracies, although the
e6tent to which this should happen is always contro&ersial.
Hepricing I ta6es are le&ied to address e6ternalities.
Hepresentation I the fourth conse-uential e1ect of ta6ation in its historical setting
has been the representation. The <merican He&olution made the slogan %no ta6ation
without representation' famous which implied that when leaders impose ta6 on
citi$ens, citi$ens in turn may demand accountability from their leaders as the other
part of the bargain.
". ,and reform refers to the full range of measures that may or should be taken to
impro&e or remedy the defects in the relations among men with respect to the rights
in the use of land. @hile agrarian reform refers to the term which comprises not only
land but also the reform and de&elopment of complimentary institutional frameworks,
rural education and social welfare institutions, and not limited, simply, to the
-uestions of he relations of the farmers to the land.