LEA REVIEW QUESTIONS

AREA: AGRICULTURAL ECONOMICS AND MARKETING

1. The following are currently categorized as communist countries, except:

a. Laos b. Cuba c. Japan d. China
2. This economic decision addresses the tendency of overprotection.
a. How to produce?
b. For whom to produce?
c. How much to produce?
d. When to produce?
3. The concept of opportunity costs refers to the following except:
a. A result of choices c. Sufficiency of resources
b. Trade-offs in all decisions d. Result of allocation
4. Who is the current (Aquino Administration) Secretary of the Department of Agrarian Reform?
a. Rosalinda D. Baldoz c. Gregory L. Domingo
b. Virgilio R. Delos Reyes d. Cesar V. Purisima
5. The shift in the production possibilities frontier results from:
a. Inflation
b. Changes in production techniques
c. Changes in the combination of good produced
d. Increase in economic resources
6. This is an economic system driven by purely self-interest of consumers and producers.
a. Market economy c. Mixed economy
b. Command economy d. Communism
7. Which of the following are two fundamental conflicting problems, the reason why economist exist?
a. Choice and allocation
b. Limited income and limited goods
c. Scarcity and unlimited goods
d. Limited resources and unlimited wants/needs
8. What is the probable opportunity cost of increasing three times the budget of the Agriculture sector
than the previous year?
a. Decrease in performance of other sector
b. Improvement in the facilities and programs in Agriculture
c. Growth in the service sector
d. Increase farm subsides
9. The following are perceived to be more beneficial, except:
a. Economic growth c. Population growth
b. Economic development d. Per capita income growth
10. Which economy has an absolute advantage in sugarcane production?
a. Brazil c. China
b. Philippines d. Singapore
11. William of Ockman introduced this important economic principle:
a. allocation c. opportunity cost
b. Ceteris paribus d. absolute advantage
12. An economic concept that utilizes available resources to its best and efficient use.
a. opportunity cost c. distribution
b. Ceteris paribus d. allocation
13. It refers to the tabular representation of the relationship between price and quantity demanded.
a. Law of demand c. Demand schedule
b. Law of supply d. Supply schedule
14. If there is a negative relationship between the price of good X and the demand for good Y, then:
a. Goods X and Y are substitutes
b. Goods X and Y are complement
c. Good Y is an inferior good
d. Good Y is a normal good
15. Commodities whose demand varies directly with money income refers to:
a. Substitute goods c. normal goods
b. Complementary goods d. inferior goods
16. Which of the following is least likely to have an elastic demand?
a. Gasoline c. Cars
b. Imported wine d. Jewelries
17. Which of the following would make the demand for a product elastic?
a. it is unique c. it has many possible uses
b. it is very cheap d. it is considered a necessity
18. The stage of production which is considered to be rational stage of production:
a. Stage 1 c. Stage 3
b. Stage 2 d. Stage 4
19. The addition to total output resulting from employing an additional unit of resource is:
a. Average product c. Marginal product
b. Total product d. a production function
20. Marginal cost and average cost are related in this way:
a. When MC is less than AC, AC is falling
b. When MC is greater than AC, AC is falling
c. When MC is equal to AC, MC is at a minimum
d. None of the above
21. These are actual costs or “out of pocket” expenses incurred in the production of goods and
services:
a. implicit costs c. explicit costs
b. variable costs d. fixed costs
22. If he has incurred a total fixed cost of P5, 000.00, how much is his average fixed cost per sack?
a. P100.00 c. P150.00
b. P125.00 d. P50.00
23. Economies and diseconomies of scale occur mainly because:
a. of the law diminishing returns
b. Firms in an industry must be relatively large in order to use the most efficient productive
techniques
c. Of the inherent difficulties involved in managing and coordinating a large business
enterprise
d. The short run average total cost curve rises when marginal product is greater than average
total cost
24. In the Philippines, national income is done and maintained by what office/agency?
a. Department of Budget and Management
b. Department of Trade and Industry
c. Department of Finance
d. National Economic Development Authority (NEDA)
25. Economists prefer to use real GNP than current or nominal GNP as a measure of aggregate
output because
a. Current GNP always understates actual output changes
b. Real GNP adjusts current GNP for inflation
c. Real GNP adjusts for the unequal distribution of income
d. All of the above
26. Suppose the Nominal GDP in 2009 was 500 billion pesos and the CPI was 125, then the real
GDP must be:
a. P 125 billion c. P 300 billion
b. P 499 billion d. P 500 billion
27. The consumption function/equation C = 20 + .90 Yd predicts that consumption is:
a. 90 when disposable income (Yd) is 100
b. 100 when Yd is 90
c. 110 when Yd is 100
d. 180 when Yd is 200
28. Based from # 16, if C = 20 + .90Yd, the equation saving function is:
a. S = -20 + .10Yd c. S = 20 - .9Yd
b. S = 0 + .Yd d. S = .9 + 20 Yd
Given the following equations, answer item 26:
S = -25 + 0.4Y; G = 20; I = 15; T=0
29. The equilibrium level of income (Y) is:
a. 100 b. 120 c. 150 d. 200
30. The value of the multiplier is:
a. 1.6 b. 2.0 c. 2.5 d. 3.0
31. Fiscal policies are government policies related to:
a. wages and prices
b. Money supply, credit and interest rates
c. Government expenditures and taxation
d. Investment
32. The bulk of government spending is a accounted for by
a. maintenance and operating expenses
b. debt service
c. personal services
d. capital outlay
33. By open market operations we mean the actions of the government to:
a. Increase or decrease government spending
b. Increase or decreases taxes
c. Buy and sell government securities of bonds
d. Buy and sell investment goods and services
34. This is a phase in the business cycle when economic prosperity is experienced
a. recessional phase b. peak phase c. expansion phase d. trough phase
35. A field in international economics which focuses on real transactions that involve a physical
movement of goods or a tangible commitment of economic revenues is:
a. International Finance b. International Trade
c. Production economics d. Marketing economics
36. The economic framework which has been defined by GATT-WTO calls for the expansion and
stabilization of world trade through the following except one:
a. Tariffication of quantitative restrictions
b. Reduction of domestic price and export subsidies
c. Increase tariffs on all agricultural products
d. Market access commitments and harmonization of sanitary and phyto-sanitary measures
37. These are taxes imposed as a fraction of the value of the imported goods (i.e. 20% of the
important value).
a. Import tariffs b. Ad Valorem tariffs
c. export tariffs d. all of the above
38. As a result of tariff imposition, the imposing country suffers from efficiency losses which include
the following:
a. Production distortion losses b. Consumption distortion losses
c. a and b d. any of the above may be true
39. Trade liberalization is the result of the following except one:
a. tariff reduction b. elimination of production subsidies
c. elimination of export subsidies d. limited flow of goods from abroad
40. The following are forms of trade restrictions except one:
a. tariff b. Quota
b. Import licenses D. Subsidy
41. The expenditures of the domestic economy on imported goods are called:
a. imports b. exports
c. investment income d. transfer payments
42. When a country engages in international transactions, it always involves at least two kinds of
currencies. The value of domestic currency relative to the foreign currency is called:
a. foreign exchange rate b. domestic exchange rate
c. foreign exchange d. none of the above
43. The fixed exchange rate, on the other hand is determined by:
a. forces of supply and demand through foreign exchange
b. the demand for a particular currency alone
c. the supply for a particular currency alone
d. the government through the Central Bank
44. When the Central Bank of the Philippines devaluates its currency against the US dollar, it means
that:
a. the value of the peso increases against the dollar
b. the value of the peso declines relative to the dollar
c. the value of the peso remains the same
d. none of the above is correct
45. The opposite of devaluation is called:
a. evaluation b. revaluation c. depreciation d. appreciation
46. When the Philippine currency depreciates against the US dollar due to forces of supply and
demand, it means that:
a. the value of the peso increases against the dollar
b. the value of the peso declines relative to the dollar
c. the value of the peso remains the same
d. none of the above is correct
47. The opposite of depreciation is called:
a. evaluation b. revaluation c. depreciation d. appreciation
48. When evaluation or depreciation occurs, it means that:
a. the foreigners have to lay more for the devalued currency
b. the foreigners have to pay less for the devalued currency
c. the foreigners have to pay the same for the devalued currency
d. the foreigners cannot determine how much to pay for the devalued currency
49. When the exchange rate (P/S) increases, the value of the peso relative to the dollar becomes:
a. stronger c. remains the same
b. weaker d. cannot be determined
50. It is an increase in the capacity of an economy to produce goods and services, compared from
one period of time to another.
a. Economic Development b. Economic Growth c. Economic Growth rate
d. Technological Change
51. Advantages are felt when there is an occurrence of economic growth, except:
a. Higher standard of living b. Fiscal dividend c. Growth and business confidence
d. Inflation risk
52. The______of the economy refers to the manner in which the elements or units of the system are
related to one another and the whole.
a. Structure b. Productive capacity c. Development d. Growth
53. One of the characteristic of a developing economy the income is ____distributed.
a. less inequitably b. more inequitably c. equitably d. none of the above
54. By how much percentage agriculture and fisheries contributes to the GDP of the economy based
on the BAS 2011 data.
a.17 percent b. 20 percent c. 19 percent d. 25 percent
55. Republic Act _____is known as the Organic Agriculture Act of 2010.
a. 8435 b. 8550 c. 10068 d. 10150
56. Agriculture is the key to_____except.
a. Poverty alleviation b. Progress c. Profit d. Food security
57. The daily nominal wage rates of agricultural workers during the first half of the year were P 227.23
in palay farms and ____in corn farm.
a. P 175.25 b. P 180. 75 c. P 150.00 d. P 120.50
58. Economic growth is measured by the annual percentage change in ____GDP.
a. Nominal b. Real c. Proportional d. Money
59. Economic growth has the formula.
a. GDP1- GDP2/ GNP1 b. GDP1- GNP1/ GDP2 c. GDP2 - GDP1/ GDP1
d. GNP2- GDP1/ GDP2
60. Drivers for economic growth is the accumulation of physical and ___capital.
a. Human b. Investment c. Educational d. Political
61. How much percentage does agriculture expenditure shares in the national expenditure based
from BAS 2011.
a.10 % b. 6 % c. 9 % d. 15 %
62. In livestock production shows a ____trend for the year 2011
a. Upward b. Downward c. No trend d. None of the above
63. In agriculture trade, what contributed bigger share in the market in 2011.
a. Coconut oil and tuna b. Banana and pineapple c. Tobacco and poultry meat
d. Cut-flower and mango
64. The country’s recorded agricultural pre-deficits is.
a. Japan and Canada b. Australia and USA c. European Union
d. None of the above
65. It is defined partly as an art, science and also a business with all parts interacting in the cultivation
of crops and raising of livestock and fish either for direct consumption or for sale.
a. Environmental Science b. Agriculture c. sustainability
d. Aquaculture
66. It is defined as strategy of improving the soil’s natural capability to nurture plant life through
constant recycling of nutrients and maintenance of soil fertility, moisture and microbial condition.
a. Organic Farming b. Sustainable Development c. Sustainable Agriculture
c. Soil Nutrition
67. Essential ingredient for economic growth, except:
a. Technology b. Capital formation c. Psychological development
d. Human resources
68. It is a system of a crop or grain production wherein maximum inputs are applied to a given area in
order to produce maximum output.
a. Extensive agriculture b. Intensive agriculture c. International agriculture
d. External agriculture
69. It refers to the factors that derived the average cost curve downward as the firms operation
expands:
a. Comparative advantage b. Economies scale c. Marginal cost
d. Opportunity cost
70. Economic development means:
a. Increase in output b. Changes in economic structure c. All of the above
d. None of the above
71. When there is economic development, the % in agriculture shares ____relative to other sector.
a. Increase b. Decrease c. Constant d. None of the above
72. Republic Act 6657 of 1998 is the legal base for the implementation of CARP is known as:
a. Agrarian Reform b. Comprehensive Agrarian Reform Law c. Agriculture Act
d. None of the above
73. Vicious cycle of poverty is characterized by:
a. Low of income and savings b. Low of production and consumption
c. All of the above d. None of the above
74. Economic development is shaped not only by economic factors but also:
a. Environment factors b. Social factors c. Cultural conditions
d. All of the above
75. Which of the following does not support and complement our definition of a market?
a. a place where buyers and sellers meet to exchange goods and services
b. buyers and sellers may use telephone, mails and other communication facilities to transact
c. a market has three elements: buyers, sellers and consumers
d. in order for a market transaction to be completed both buyer and seller must agree at a
particular price
76. Which of the following are activities or functions that include finding buyers, buying, selling and
risk taking?
a. transactional functions b. logistical functions c. facilitating function
d. none of the above
77. Which of the following approaches to agricultural marketing gives primary emphasis to human
element?
a. commodity approach b. functional approach
c. market structure, conduct and performance approach
d. institutional approach
78. What represents the point at which price determination enters into the study of marketing?
a. exchange function b. facilitating function c. physical function
d. market and intelligence function
79. This study covers the characteristic of the product, market demand and supply situation at
domestic and international levels, the behavior of consumers in relation to a specific product and
prices at the farm, wholesale and retail level:
a. functional approach b. commodity approach c. institutional approach
d. market structure, conduct and performance approach
80. Which of the following refers to making the right products available at the right place at the right
time?
a. promotion b. advertisement c. distribution d. pricing
81. Which of the following function is primarily concerned with making goods available at the proper
place?
a. storage function b. transportation function c. processing function d. standardization
82. What marketing function is responsible for the job of collecting, interpreting and disseminating the
large variety of data necessary to the smooth operation in the marketing process?
a. Financing b. Standardization c. Market intelligence d. Risk-bearing
83. Those individuals or business concerns that specialize in performing the various marketing
functions involved in the purchase and sale of goods as they moved from producers to
consumers.
a. Middlemen b. Processors c. Framers d. Consumers
84. They are considered the “actors” in the system who perform vital functions but sometimes they
gate the ire of the producers, consumers and the government:
a. Producer subsystem b. Environment subsystem c. Channel subsystem
d. Functional subsystem
85. This function involves in solving the problems of when, what and where in marketing:
a. Exchange function b. Physical function c. Facilitating function
d. Marketing function
86. Which of the following terms best applies to a single seller market?
a. monopsony b. monopoly c. oligopoly d.oligopsony
87. Which of the following forces in marketing determines the market price of agricultural products?
a. Law of comparative advantage b. Forces of demand c. Forces of supply
d. Law of supply and demand
88. Which of the following items is a technique of forecasting price of a product?
a. Time series analysis b. Statistical analysis c. Trial and error d. None of these
89. Firm A produces Product X with a total cost of production of P15/unit. The said firm desires to
have a profit of P 8/unit. How much is the mark up price of the product?
a. P 20 b. P 23 c. P 7 d. P 25
90. Which of the following terms is defined as the personal and impersonal process of assisting a
prospective customer to buy a commodity?
a. Advertisement b. Distribution c. Promotion d. None of the above
91. It is the oral presentation of the product wherein the marketer sometimes goes from house to
house to influence prospective customers to buy his products:
a. Advertising b. Publicity c. Sales promotion d. Personal selling
92. What term best applies to activities concerned with the physical supply of the products including
transportation, storage and physical distribution?
a. Logistical b. Transactional c. Facilitating d. Financial
93. If a retailer purchased tomatoes from a wholesaler at P 15 per kilogram and sold them to
household consumer at P 20 per kilogram, the percentage mark up could be:
a.75 % b. 133 % c. 33 % d. 25 %
94. The resulting trend equation for potato using the above information is: b= 3.14 Y=10 X=2
a. Y = 6.28 + 3.14 X b. Y = 3.72 + 3.14 X c. Y = 13.72 + 3.14 X
d. Y = 12.80 + 6.86 X
95. The slope (b) explains:
a. Average price increase per year amounting to P 3.72
b. Average price increase per year amounting to P 3.14
c. Average price increase per year amounting to P 6.86
d. None of the above
Consider the following data for cabbage:
Farm-------------------------P 12/kg
Retail price-----------------P 18/kg
Marketing cost-------------P 0.65/kg
96. Determine the farmer’s share:
a. 67 % b. 33 % c. 50 % d. 45 %
97. It refers to all services, activities or functions involved in moving the farm products from the point
of production to the point of consumption:
a. Distribution b. Marketing c. Transportation d. Trading
98. Which of the following is not a component (sub-system) of marketing system:
a. consumer b. producer c. market channel d. none of the above
99. The behavior pattern of a firm in the industry:
a. market conduct b. market structure c. marketing performance d. marketing charges
100. A component of the marketing margin that refers to the returns to the various factors of
production used in providing the processing and marketing services rendered between the
farmers and consumers:
a. Marketing cost b. Net return c. Processing cost d. Marketing charges

Pre test Econ. and Marketing Answer Key

1. c 21. c 41. a 61. b 81. b

2. c 22. b 42. a 62. d 82. c
3. c 23. c 43. d 63. b 83. a
4. b 24. d 44. b 64. b 84. c
5. d 25. b 45. b 65. b 85. b
6. a 26. b 46. b 66. c 86. b
7. d 27. a 47. d 67. c 87. d
8. c 28. a 48. b 68. b 88. a
9. c 29. c 49. b 69. b 89. b
10. a 30. b 50. b 70. c 90. c
11. b 31. c 51. d 71. b 91. d
12. d 32. c 52. a 72. b 92. a
13. c 33. c 53. c 73. d 93. c
14. b 34. c 54. a 74. d 94. b
15. c 35. b 55. c 75. c 95. b
16. a 36. c 56. c 76. a 96. a
17. c 37. b 57. a 77. d 97. b
18. b 38. c 58. b 78. a 98. d
19. c 39. d 59. c 79. b 99. a
20. a 40. d 60. a 80. c 100. a