Republic of the Philippines

Department of Education
Region I
SCHOOLS DIVISION OFFICE I PANGASINAN
Lingayen
BANOG SUR NATIONAL HIGH SCHOOL
Bani
DIAGNOSTIC TEST IN APPLIED ECONOMICS 12

NAME: ___________________________________________ SCORE: _____________________

GRADE : ________________________________________ DATE:_______________________
DIRECTIONS: Read and analyze each item carefully and solve for what is asked. Shade the circle that

corresponds to the letter of your answer in your answer sheet. DO NOT WRITE ANYTHING IN THE TEST

QUESTIONNAIRE.

1. What division of Economics deals with the economic behavior of the individual units such as consumers,
firms, the owners of factors of productions?
A. Macroeconomics C. Micro Market
B. Macro Market D. Microeconomics
2. Which of the following is a situation wherein the amount of something available is insufficient to satisfy
the desire for it?
A. Resources
B. Scarcity
C. Unlimited
D. Wants
3. The following are the relations of Economics to Science, EXCEPT what?
A. Literature
B. Mathematics
C. Natural Science
D. Politics
4. Which of the following Economic Resources is a man-made resources used in the production of goods and
services?
A. Capital
B. Labor
C. Land
D. Money
5. What is the ultimate end of an economic activity?
A. Consumption C. Production
B. Distribution D. Public Finance
6. This refers to the resource mix and technology applied in production.
A. For whom to spend C. What to produce and how much
B. How to produce D. When to produce
7. The basic question in economics asking about the market for the product.
A. For whom to produce C. How much to produce
B. For whom to spend D. Where to produce
8. The economic system that based on the working of demand and supply, decisions are made on what goods
and services to produce.
A. Command economy C. Overflow economy
B. Market economy D. Traditional economy
9. The subject that help you to budget effectively and efficiently allocate the use of whatever resources that
are available.
A. Accounting C. Economics
B. Comerce D. Marketing
10. Which of the following is NOT a step in scientific approach in the empirical testing of an economic
theory?
A. Apply the rules of logic to an observed facts to know causal relationship
B. Establish a set of principles such that formulated hyphotheses may be
tested as to whether they are valid or not
C. Use statistics and econometrics as empirical proof in testing hypotheses
D. Verify the conclution by using the GNP equation
11. What microeconomic law states that all other factors being equal, as the price of a good or service
increases, consumer demand for the goods or services will decrease and vice versa?
A. Ceteris paribus C. Law of Supply
B. Law of Demand D. Law of Supply and Demand
12. Which law states that all other factors being equal, as the price of a good or service increases, the
quantity of goods or services that suppliers offer will increase?
A. Ceteris paribus C. Law of Supply
B. Law of Demand D. Law of Supply and Demand
13. What economic term refers to the willingness of the consumer to buy a commodity at a given price?
A. Demand C. Price
B. Equilibrium D. Supply
14. What economic term refers to the quantity of goods that the seller is willing to offer for sale?
A. Demand C. Price
B. Equilibrium D. Supply
15. Choose the economic term that refers to the quantity of a commodity that producers are willing to sell at
a particular price at a particular point in time?
A. Quantity supplied C. Supply Schedule
B.Supply D. Supply curve
16. What do you call the situation where there is an excess supply for the quantity demanded?
A. Shortage
B. Surplus
C. Equilibrium
D. Breakeven
17. What do you call the situation where there is an excess demanded for the quantity supplied?
A. Shortage
B. Surplus
C. Equilibrium
 D. Breakeven
18. What is referred to as the willingness to buy any goods or services should be accompanied with the ability
to buy?
A. Efficient Demand
B. Effective Demand
C. Quality Demand
D. Equilibrium on Demand
19. When there is equilibrium, the supply and demand are usually?
A. Conflicting
B. Unstable
C. Balanced
D. Matched
20. What is defined as the price at which the producer can sell all the units he produced in agreement with
the buyer?
A. Fixed Price
B. Book Value
C. Par Price
D. Equilibrium Price
21. What is the difference between perfect competition and monopolistic competition?
A. Perfect competition has barriers to entry while monopolistic competition does not.
B. Perfect competition has no barriers to entry, while monopolistic competition does.
C. Perfect competition has a large number of small firms while monopolistic competition does not.
D. In perfect competition, firms produce identical goods, while in monopolistic competition, firms
produce slightly different goods.
22. The market type known as perfect competition is __________?
A. Dominated by fierce advertising campaigns.
B. Almost free from competition and firms earn large profits.
C. Highly competitive and firms find it impossible to earn an economic profit in the long run.
D. Marked by firms continuously trying to change their products so that consumers prefer
their product to their competitors' products.
23. Which of the following market types has all firms selling products so identical that buyers do not care
from which firm they buy?
A. Monopoly C. Monopolistic competition
B. Oligopoly D. Perfect competition
24. Perfect competition is characterized by all of the following EXCEPT
A. Large number of buyers and sellers.
B. Considerable advertising by individual firms.
C. No restrictions on entry into or exit from the industry.
D. Well-informed buyers and sellers with respect to prices.
25. Which of the following is the best example of a perfectly competitive market?
A. Athletic shoes
B. Diamonds
 C. Farming
D. Soft drinks
26. What do you call things that you gave up when you make a choice?
A. Choice C. Problem
B. Opportunity cost D. Trade-off
27. What do you call the application of economic principles and theories to realworld situations?
A. Applied Economics C. Macroeconomics
B. Economics D. Microeconomics
28. What do you call the condition in which our wants are greater than our limited resources?
A. Economics C. Scarcity
B. Opportunity Cost D. Trade-off
29. Which of the following classifications does not fall under underemployment?
A. Highly skilled but working in low paying jobs
B. Part-time workers who would prefer to be full time.
C. Without work and currently available for work
D. Workers who are highly skilled but working in low skill jobs
30. When does underemployment occur?
A. It is when a person does have work
B. It is when a person does not have work
C. It when a person does not work for a job that fits his/her skills.
D. It is when a person works for a job that fits his/her skills.
31. What is the business technique wherein the data came from analyzing contrasting elements in the
business environment?
A. Environmental Analysis
B. Environmental Scanning
C. External Business Environment
D. Internal Business Environment
32. What does “setting performance-standards” mean in the world of business?
A. Benchmarking
B. Business Prediction
C. Demand equals Supply
D. Market Equilibrium
33. Which of the indicators of PEST Analysis gives importance to the Filipino culture when affected by
economic situations?
A. Economic
B. Political
C. Social
D. Technological
34. The idea of seeing and experiencing “touch screens” inside the banks fall under which indicator?
A. Economic
B. Political
C. Social
 D. Technological
35. What business tool is considered the inverted format of SWOT Analysis?
A. SOAR Analysis
B. SOAR Matrix
C. TOWS Analysis
D. TOWS Matrix 16
36. When employees from your competitors “spy” your product pricing strategies, this situation is a case
under which of the following?
A. Business Ethics
B. Business Finance
C. Business Mathematics
D. Monkey Business
37. What is the first thing that a businessman or entrepreneur should do when creating a business?
A. Business Plan
B. Personality Analysis
C. SMART Analysis
D. SWOT Analysis
38. What business tool must also be included in researches?
A. Feasibility Study
B. Financial Report
C. Forecasting
D. Organizational Structure
39. What business indicator best explains the idea of scarcity?
A. Opportunities
B. Strengths
C. Threats
D. Weaknesses
40. The adage, “The customer is always right” falls under which column of the
PEST Analysis?
A. Economic
B. Political
C. Social
D. Technological

Prepared by:
Checked by:
ELAINE ROSE R. TABAREJOS
Teacher I SAMSON Q. LIVARA
ASP II