APPLIED ECONOMICS

SENIOR HIGH SCHOOL FIRST SEMESTER – Final Examination

Name: _______________________________ Date: ____________________
Teacher: Score: ____________________
TEST I. Identification. Write on the blank the word being referred to. (25 points)
_______1. They refer to inherent features of the industry and various means devised in the market to prevent the
entry of potential players and competitors that want to take advantage of the enormous profit in industry.
_______2. They are benefits reaped and costs incurred by parties outside the transactions between the firms and
its suppliers, on the other hand, and the firms and its customers or buyers, on the other.
_______3. They refer to proprietary rights and their corresponding legal protection extended to existing market
players in the production and distribution of a product or service.
_______4. It is an element that refers to the unevenness in the distribution of information among the actors in
market.
_______5. It refers to the number of sellers and buyers in the market.
_______6. It is a market structure where there is a single buyer.
_______7. They are positive impacts of various external environments on the profitability of an industry.
_______8. It is a factor that refers to the ability of a business firm to create a market niche through several means
of varying its products and services.
_______9. They refer to requirements for a large production plants for a feasible operation in the industry.
_______10. They refer to situations where the workers are assigned in fields and places other than the normal
business office.
_______11. They are internal characteristics of firms or industry that can contribute directly to the profitability of
firms and the industry.
_______12. It is the responsiveness of the demand for a substitute good due to a change in the price of the
product produced in the industry.
_______13. They are undesirable impacts of external factors because they can potentially impair the profitability
of firms in an industry.
_______14. It is composed of two components, output produced and the price of the commodity.
_______15. They are internal characteristics of firms or industry that mitigate their profitability.

a. Barriers to entry f. Market concentration k. Spatial working conditions

b. cross elasticity of demand g. Monopsony l. Strengths
c. Externalities h. Opportunities m. Threats
d. Legal barriers i. Product differentiation n. Total revenue
e. Limited information j. Scale barriers o. Weaknesses

TEST II. MATCHING TYPE. Complete the table by enumerating Porter’s Five Forces of Competitive Position (in any
order) then choose two ways from the list below on how to mitigate the forces by writing the letters on the blank
provided before each number.
Porter’s Five Forces of Competitive Position Ways to Mitigate each Force

A. Allow the potential competitors to enter and establish their plants in the industry then expand the
production and lower the price.
B. An alternative is for the industry to sell a variety of differentiated product instead of a single product.
C. Companies with huge resources can integrate vertically.
D. Cooperate and act like a monopolist in an oligopolistic market.
E. Engage in research and development.
F. Lower the cross elasticity of demand.
G. One option is to diversify the buyers of the product.
H. Take advantage of the ability of the sellers to differentiate their products and appeal to specific market
segments in a monopolistically competitive market.
I. The industry can adjust by diversifying its sources of raw materials.
J. Widen the differentiation from the substitute goods.
TEST III. MODIFIED TRUE OR FALSE. Write TRUE on the blank if the statement is correct. Otherwise, cross out the word
or phrase that made the statement false and write the correct word or phrase on the blank before the number.
_______1. An oligopolistic market is considered the most concentrated with a single seller determining the price
that would maximize the profit of the business enterprise.
_______2. If the scale barrier is high, existing players have market power since potential entrants without the
necessary resources may be automatically excluded and prevented in entering the industry.
_______3. Sourcing raw materials from external suppliers may have greater positive effects on the local economy
than sourcing it externally.
_______4. Sourcing intermediate inputs from independent suppliers is cheaper but the contribution on the
purchasing firm on inclusive growth may be limited.
_______5. Direct hiring gives laborers security of tenure, higher compensation and a number of monetary and
non-monetary benefits.

TEST IV. MULTIPLE CHOICE. Write the letter of your answer on the blank provided before each number.
_______1. This may be used by firms in various industries to mitigate the bargaining power of labor unions.
a. Firing all the members of the labor union c. Mass lay-off
b. Hiring new regular employees d. Subcontracting of labor services
_______2. Choose the one that can be used to mitigate the bargaining power of the buyers of the products and
enhance the profitability of the industry
a. Diversification of buyers c. privatization
b. liberalization d. subcontracting
_______3. It is used to analyze the factors and forces that have indirect impacts in the profitability of firms.
a. Economic Analysis of profitability c. Porter’s Five Forces of Competitive Position
b. Environmental scanning d. SWOT Analysis
_______4. It is another term for externalities.
a. differentiation c. SWOT analysis
b. Spillover effects d. Valuation
_______5. Which of the following is an intermediate input?
a. Capital c. Land
b. Labor d. Raw materials

TEST V. SWOT ANALYSIS APPLICATION. Write the letter under the appropriate column.
Sector Strengths Weaknesses Opportunities Threats
Agricultural Sector
and Agribusiness
Industrial Sector and
Manufacturing
Industries
Services Sector and
Retail Services

Agricultural Sector and

Agribusiness
a. Climate change
b. Government support in
agriculture
c. High cost of fertilizers and
farm inputs
d. Increasing income of
consumers
e. Large coastlines and
municipal water
resources for commercial
fishing
f. Low productivity of
farmers
g. Use of modern
technology in large scale
farm production
h. Utilization of less
productive marginal
uplands
Industrial Sector and
Manufacturing Industries
a. Availability of raw
materials
b. Cheap manufactures
from China
c. High cost of electricity
and power
d. Increasing inflow of
foreign investment
e. Increasing population
f. Industries can be scaled
into micro, small, medium
and large enterprises
g. Insufficient investment in
equipment and physical
capital
h. Migration of skilled
workers
Services Sector and Retail
Services
a. Educational reform
including K-12
b. Huge informal sector
c. Internationally
competitive BPO
d. Liberalization and
expansion in trade in
services
e. Migration of skilled
workers
f. Services are embedded
in agricultural and
industrial production
g. Variability of quality
services

TEST VI. Enumeration.

Five (5) elements in the definition of economics (in any order)

1. ___________________________________________________________________________________________________
2. ___________________________________________________________________________________________________
3. ___________________________________________________________________________________________________
 4. ___________________________________________________________________________________________________
5. ___________________________________________________________________________________________________
Six (6) Factors in environmental scanning (in any order)
6. ___________________________________________________________________________________________________
7. ___________________________________________________________________________________________________
8. ___________________________________________________________________________________________________
9. ___________________________________________________________________________________________________
10. ___________________________________________________________________________________________________
11. ___________________________________________________________________________________________________
Three (3) of the benefits of sourcing laborers from the community where the business company is located
12. for the laborers: __________________________________________________________________________________
13. For the firm: __________________________________________________________________________________
14. For the community: __________________________________________________________________________________
Two (2) types of Scarcity
15. __________________________________________________________________________________
16. __________________________________________________________________________________
Four (4) of the Basic Economic Problems in the Philippines
17. __________________________________________________________________________________
18. __________________________________________________________________________________
19. __________________________________________________________________________________
20. __________________________________________________________________________________