REVIEWER FOR FINALS IN MICROECONOMICS

“PAKIBASA ANG LAST WILL SA DULO”

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TOTAL UTILITY 1. Marginal utility is the change in the _______ that the consumers experiences as a result
of varying in a very small amount of the consumption of a certain good.

SATISFACTION 2. Total utility is an aggregate measure of _______ gained from consumption.

NEEDS-WANTS 3. For you to value something, you must have _______ and _______ for that good and
service.

DIAMOND-WATER 4. Paradox of value, also known as _______ paradox.

IDENTIFICATION

THE LAW OF DEMINISHING MARGINAL UTILITY 5. Explains that as a person consumes an item or a
product, the satisfaction or utility that they derive from the product wanes as they consume more and
more of the product.

VALUE OF EXCHANGE 6. These are resources that can be sold for in exchange for other product.

MARGINAL UTILITY 7. Measure of change I satisfaction gained from consumption as a result of a

change in consumption.

VALUE OF USE 8. Define as drinking water to satisfy your thirst.

MARGINAL UTILITY 9. It yields smaller and smaller by successive units of a product.

TRUE OR FALSE

FALSE 10. Not everyone values goods/service differently.

TRUE 11. You must utility for the good/service and get some satisfaction from it.

FALSE 12. We understand that water is necessary to sustain life and that ornament such as golds are just
that certainly life sustain.

FALSE 13. The consumer will not buy more only if the price falls.

TRUE 14. Piece of diamonds are scarce relative to demand.

MULTIPLE CHOICE

D. SCARCITY 15. Refers to the basic economic problem, the gap between limited that is, scarce-
resources and theoretically limitless wants.

a. Labor Market b. Price Control c. Price d. Scarcity

A. LABOR MARKET 16. It is also known as a Job Market.

a. Labor Market b. Credit Market c. Price Control d. Price Floor

C. MARKET EQUILIBRIUM 17. It is when the supply and demand curves intersect, the market is in
equilibrium.

a. Credit Market b. Labor Market c. Market Equilibrium d. Price

A. LABOR MARKET 18. Refers to supply and demand for labor in which employees provide the supply
and employers the demand.

a. Labor Market b. Credit Market c. Price Control d. Price Floor

D. MARKET EQUILIBRIUM 19. This is where the quantity demanded and quantities supplied are equal.

a. Credit Market b. Labor Market c. Price d. Market Equilibrium

A. CREDIT MARKET 20. Refers to the market through which companies and governments issue debt
to investors. a. Credit Market b. Price Control c. Price Floor d. Labor Market

C. FAUCITY 21. A term that is also refers to scarcity.

a. Scarcity b. Price c. Faucity d. Price Floor

A. CREDIT MARKET 22. These are the example of this market: investment grave bonds, junk bond and
short-term commercial paper.

a. Credit Market b. Price Control c. Price Floor d. Labor Market

A. PRICE CONTROL 23. It is usually implemented as a means of direct economic intervention to

manage the affordability of certain goods.

a. Price Control b. Price Ceiling c. Price d. Scarcity

B. PRICE CONTROL 24. These are government mandated legal minimum or maximum prices set for
specified goods. a. Price Floor b. Price Control c. Price Ceiling d. Credit Market

A. PRICE FLOOR 25. This is a minimum price defined as an intervention to raise market prices if
the government feels the price is too low.

a. Price Floor b. Price Control c. Price Ceiling d. Scarcity

B. PRICE CEILING 26. It is the mandated maximum amount a seller is allowed to charge for a
product or service. a. Price Floor b. Price Ceiling c. Price Control d. Scarcity

A. PRICE CEILING 27. It is usually set by law.

a. Price Ceiling b. Price Control c. Price Floor d. Credit Market

ENUMERATE

- PRICE CEILING 28. Give the two kinds of price control.

- PRICE FLOOR
IDENTIFICATION

PRODUCTION POSSIBILITY CURVE 30. This is the other term for production-possibility frontier (PPF).

TECHNOLOGY 31. It is the collection of techniques, skills, method and processes used in the production
of goods or services.

RESOURCES 32. It is a mean to undertake an enterprises and desire outcome.

PRODUCTION POSSIBILITIES 34. It refers to the ability of the country to produce goods or services
given the limited resources and technology.

ECONOMIC GROWTH 35. It is defined as an increase in the output that an economy produces over a
period of time.

LAND 36. Ii is an economic-resources that includes natural physical resources.

RECESSION OR DEPRESSION 37. A reason why resources are not being used.

CAPITAL 38. It is a term that means investment in capital goods.

TECHNE 39. A Greek word meaning “Science of Crafts.”

LABOR 40. It is the human input in the production or manufacturing process.

MICROECONOMICS 41. It is a branch of economics that studies the behavior of individuals in making
decisions regarding the allocation of scarce resources and the interactions among these individuals and
firms.

SCARCITY 42. Refers to the basic economic problem, the gap between limited that is, scarce-
resources and theoretically limitless wants.

OPPORTUNITY COST 43. A benefit, profit or value of something that must be given up to acquire or
achieve something else.

BASIC ECONOMIC DECISIONS 44. Are those decisions in which people ( or families or countries ) must
choose what to do in a condition of scarcity.

MICROECONOMICS 45. From a Greek-prefix mikro - meaning “small” + economics).

TRUE OR FALSE

TRUE 46. Microeconomics involves “the sum total of economic activity, dealing with the issues of
growth, inflation and unemployment and with national policies relating to these issues.

TRUE 47. One goal of microeconomics is to analyze the market mechanisms that establish relative prices
among goods and services and allocate limited resources among alternative uses.

TRUE 48. Scarcity is when the means to fulfill ends are limited and costly.

TRUE 49. Scarcity requires people to make decisions about how to allocate resources efficiently.

TRUE 50. The statements under positive economics can be tested or verified.
FALSE/OBJECTIVE 51. The statements under positive economics are not objective in nature.

FALSE/OPPORTUNITY 52. Scarcity is defined as the most desired trade-off of a decision.

FALSE/CAN BE VERIFIABLE 53. Positive economics can’t be verifiable.

TRUE 54. Considering opportunity costs can guide you to more profitable decision-making.

FALSE/NON-ZERO 55. Any resources that has a zero cost to consume is scarce to some degree.

ENUMERATION

56. 3 Essential Questions in Scarcity 1. What good and services should be produced?

2. How should they be produced?

3. For whom should they be produced?

57. 3 Basic Economic Questions 1. What goods and services to produce and in what quantity?

2. How to produce this goods and services, or how to use the

economic resources?

3. Who gets this goods and services?

IDENTIFICATION

CETERIS PARIBUS 58. It is used in economics to rule out the possibility of other factors changing.

LAW OF DEMAND 59. Asserts that there is an inverse relationship between the price, and the
quantity demanded.

DEMAND SCHEDULE 60. Is a chart that shows the number of goods or services demanded at specific
prices.

SUPPLY 61. Is the amount of a resource that firms procedure, laborers, providers of financial
assets, or other economic agents are willing and able to provide to the market place or directly to another
agent in the market place.

MARKET SUPPLY CURVE 62. Is a graph detailing how much good or service all the producers would
furnish at different prices.

FILL IN THE BLANKS

ECONOMIC PRINCIPLE 63. Demand is _______ referring to a consumer’s desire to purchase goods and
services and willingness to pay a price for a specific good or service.

DECREASE 64. The substitution effect is the _______ in sales for a product that can be attributed to
consumer’s switching to cheaper alternatives when its price rises.

MATHEMATICAL 65. A demand function is a _______ equation which expresses the demand of a
product or services.
GRAPHICAL 66. Demand curve is a _______ representation of the relationship between the price of a
good or service and the quantity demanded for a given period of time.

DEMAND 67. The income effect is the change in _______ for a good or service caused by a change
in a consumer’s purchasing power.

ENUMERATION

68. Other matters that can affect the except the price.

- PRICES – SUBSTITUES – COMPLEMENTARY GOODS – INCOME

TRUE OR FALSE (Identify)

FALSE/DEMAND CURVE 69. Market Supply Curve is a graphical representation of the relationship
between the price of a good or service and the quantity demanded for a given period of time.

TRUE 70. Law of Supply is a positive relationship between quantity supply and price and is the reason
for the upward slope of the curve.

FALSE/DEMAND SCHEDULE 71. Demand Function, it is a chart that shows the number of goods or
services demanded at a specific prices.

FALSE/DEMAND 72. Supply is an economic principle referring to a consumer’s desire to purchase

goods and services and willingness to pay a price for a specific goods.

TRUE 73. Ceteris Paribus, used in economics to rule out the possibility of ‘other’ factors changing.

TRUE 74. Substitution Effect, consumers switching to cheaper alternatives when its price rises.

ELASTICITY 75. Refers to the degree to which individuals, consumers, or producers change their
demand or the amount supplied in response to price or income changes.

PRICE ELASTICITY OF DEMAND 76. An economic measure of the change in the quantity demanded or
purchased of a product in relation to its price change.

INCOME ELASTICITY OF DEMAND 77. Refers to the sensitivity of the quantity demanded for a
certain good to a change in real income of consumers who buy this good.

CROSS ELASTICITY OF DEMAND 78. An economic concept that measures the responsiveness in
the quantity demand of one good when the price for another good changes.

PRICE ELASTICITY OF SUPPLY 79. Measures the responsiveness to the supply of a good or service after
a change in its market price.

ENUMERATION

80. Factors Affecting Price Elasticity of Demand. 1. Substitute 2. Necessities 3. Time 4. Habit

81. Types of Income Elasticity of Demand 1. High 2. Unitary 3. Low 4. Zero 5. Negative

82. Types of Price Elasticity of Supply 1. Perfect Inelastic Supply 2. Relatively Inelastic Supply
3.Unit Elastic Supply 4. Relatively Elastic Supply 5. Perfectly Elastic Supply
MULTIPLE CHOICE

B. NECESSITIES 83. These are milk and gasoline that has usually have low elasticity.

a. Substitutes b. Necessities c. Time d. Habit

C. RELATIVELY INELASTIC SUPPLY 84. The PES is between 0 and 1.

a. Unit Elastic Supply b. Perfectly Elastic Supply c. Relatively Inelastic Supply d. Relatively Elastic Supply

A. TAX SHIFTING 85. Depicts the distribution of the tax obligations, which must be covered by the
buyer and seller. a. Tax Shifting b. Elasticity c. Elastic d. Inelastic

C. CROSS ELASTICITY OF DEMAND 86. Is an economic concept that measures the responsiveness in
the quantity demanded of one good when the price for another good changes.

a. Price Elasticity of Supply b. Price Elasticity of Demand

c. Cross Elasticity of Demand d. Income Elasticity of Demand

A. PERFECT INELASTIC SUPPLY 87. When the PES formula equals 0.

a. Perfect Inelastic Supply b. Unit Elastic Supply c. Perfect Elastic Supply d. Relatively Inelastic Supply

IDENTIFICATION

MARGINAL ANALYSIS 88. An examination of the additional benefits of an activity compared to the
additional costs incurred by that same activity.

DECISION-MAKING TOOL 89. Companies use marginal analysis as a _______ to help them maximize
their potential profits.

MARGINAL 90. It refers to the focus on the cost or benefit of the next unit or individual.

IRRATIONAL BEHAVIOR 91. It is usually undesirable, carrying a negative connotation.

RATIONAL BEHAVIOR 92. It refers to a decision-making process that is based on making choices that
result in the optimal level of benefit or utility for an individual.

BETTER-OFF 93. The assumption of rational behavior implies that people would rather be _______
than worse-off.

DECISIONS 94. To behave rationally, we make _______and act in ways that achieve our needs.

GOAL 95. In this way, rational behavior is _______ oriented.

MATERIAL BENEFIT 96. Rational behavior may not involve receiving the most monetary or _______.

ECONOMICS 97. It is a social science that attempts to understand how supply and demand control the
distribution of limited resources.

ENUMERATE

98. Give the 5 Reasons Why Graphs Used in Economics.

1. Time 2. Relationship 3. Data Sets 4. Changes 5. Equilibrium

MATCHING TYPE

a. Time b. Relationship c. Data Sets d. Changes e. Equilibrium

D. CHANGES 99. Economic graphs can help to illustrate what happens when there is a shift or change
in variables.

C. DATA SETS 100. Graphs of two different data sets can help to explain the relationship between
economic data

A. TIME 101. Since economists take snapshots of data, a graph of these data points help to
illustrate the movements and trends over time.

E. EQUILIBRIUM 102. One of the classic uses of graphs in economics is to determine equilibrium
and break-even points.

B. RELATIONSHIPS 103. Graphs in economics can show the relationship between two variables.

PRICE SYSTEM 104. Means of organizing economic activity.

MARKET ECONOMY 105. Exchanging and trading of goods and service.

CAPITALISM 106. Define as an economic system in which a country’s trade industry and its profit are
controlled by the private companies.

INVISIBLE HAND 107. It is a metaphor for unseen forces that move the free market economy.

INEQUALITY 108. This is a defect in price system that price help resources shift to areas of greatest
demand but it could lead to an inequitable distribution of resources.

MATCHING TYPE

a. Principle as Market b. Capitalist c. Adam Smith d. Defects in Price System e.Open Economy

C. ADAM SMITH 109. Invisible Hand

A. PRINCIPLE OF MARKET 110. “Product-Money-Product”

B. CAPITALIST 111. “Money-Product-Money”

E. OPEN ECONOMY 112. The market economy mostly free from trade barriers and exports of imports
form a large percentage of GDP.

D. DEFECTS IN PRICE 113. Limitations of price in the economy.

ENUMERATION

114. 5 Characteristics of Market Economy 1. Private Property 2. Freedom of Choice

3. Competition 4. System of Market and Prices 5. Limited Government

115. Principles of Market and Capitalist 1. “Product-Money-Product” 2. “Money-Product-Money”

116. 3 Defects in Price System 1. In presence of externalities 2. Inequality 3. Monopoly Power

TRUE IF CORRECT, WRITE THE ANSWER IF FALSE

UTILITY 117. Consumer Choice is the term economists use to describe the satisfaction or happiness a
person gets from consuming a good or service.

CONSUMER CHOICE THEORY 118. Demand theory is a hypothesis about why people buy things.

TRUE 119. Surplus is the excessive producing of product.

DECISIONS 120. Consumer choice refers to the hypothesis that consumer make with regard to
product and services.

DEMAND THEORY 121. Consumer choice theory is an economic principle relating to the relationship
between consumer demand for good and services and their prices in the market.

EQUILIBRIUM 121. Equilibrium price is the state in which market supply and demand balance each
other, and as a result prices become stable.

TRUE 122. Shortage is the lack of supply.

3 123. Consumer choice theory has 2 assumptions.

EQUILIBRIUM PRICE 124. Equilibrium is where the supply of good matches demand.

TRUE 125. Demand theory forms the basis for the demand curve.

TRUE 126. Consumer choice refers to the decisions that consumers make with regard to products and
services.

CONSUMER COICE THEORY 127. The demand theory assumes that no matter how much you shop,
you will never be completely satisfied.

TRUE 128. Consumer choice theory has influenced everything from government policy to corporate
advertising to academia.

TRUE 129. Scarcity refers to the basic economic problem.

TRUE 130. The budget constraint line shows the various combinations of two goods that are affordable
given a specific budget.

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