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Economics Midterm Examination

This document contains the answers to a microeconomics midterm exam for a student named Hannah Bandola in a class called BSLM-4. The exam consisted of three tests covering economic theories, price theory, and factors that influence demand. It also discusses how government intervention can help address market failures to improve market outcomes.

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Hannah Alvarado Bandola
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112 views

Economics Midterm Examination

This document contains the answers to a microeconomics midterm exam for a student named Hannah Bandola in a class called BSLM-4. The exam consisted of three tests covering economic theories, price theory, and factors that influence demand. It also discusses how government intervention can help address market failures to improve market outcomes.

Uploaded by

Hannah Alvarado Bandola
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bandola, Hannah

BSLM-4
Microeconomics Midterm Exam

Test I.

1. False
2. True
3. False
4. False
5. True
6. False
7. False
8. False
9. True
10. False
11. False
12. False
13. False
14. True
15. True
16. True
17. True
18. False
19. False
20. False

Test II.
Test III.

1. Both the economic theories and price theory studies the economy, the supply and demand.
Price theory is an example of Economic Theory. Price theory mainly includes as an example
how supply and demand affects the economy, The concept of Economic Theory and its scope is
bigger. Price theory is concerned with the economic behaviour or individual consumers,
producers, and resource owners. It explains the production, allocation, consumption and pricing
of goods and services.

2. The principle of Invisible Hand happens in economy when the seller and buyer meet at the
center and decide the price of a good or service is fair.

3. Non-price factors other than the current price can potentially influence the demand of a
service or product. One example would be Consumer Tastes & Preferences if a celebrity like
Heart Evangelista endorses a new product, this may increase the demand for a product
specially she is a fashion icon. On the other hand, if a new health study comes out saying
something is bad for your health, this may decrease the demand for the product like what
happened between Doc Adam and Doc Farrah.

4. Government improves market outcomes but even if how organize the system is there are still
the chances and is still possible that we face market failures like externalities, polusyon,
monopoly, loss of market competition.

So this is when there is the need for the government to enter in running a market.
What they do is they set taxes, gives subsidy or financial aid support, set the prices of products
and services. Governments provide the legal and social framework, maintain competition,
provide public goods and services, redistribute income, correct for externalities, and stabilize the
economy.

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