Q1 for Blackboard with Simple Interest
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Questions and Answers

What is a factor that influences demand?

  • Technology used in production
  • Price Expectation (correct)
  • Price of the product
  • Weather conditions

    • What is the term for the exchange mechanism that brings together sellers and buyers of a product?

  • Market (correct)
  • Industry
  • Sector
  • Economy

    • What is the result of having many sellers and many buyers in a perfectly competitive market?

  • Each seller and buyer has significant market power
  • Each buyer has significant market power
  • Each seller and buyer is sufficiently small to not influence the price (correct)
  • Each seller has significant market power

    • What is the term for the entity that makes a product, good, or service available to the buyer in exchange for monetary consideration?

    <p>Seller</p> Signup and view all the answers

    What is the characteristic of products in a perfectly competitive market?

    <p>Homogeneous products</p> Signup and view all the answers

    What is the law of supply and demand?

    <p>The theory that prices are determined by the relationship between supply and demand.</p> Signup and view all the answers

    What is the primary perspective used in decision making?

    <p>That of the owners of the firm</p> Signup and view all the answers

    What is the definition of elastic demand?

    <p>A change in quantity demanded that is greater than a change in price.</p> Signup and view all the answers

    What is the effect of using a common unit of measurement in decision making?

    <p>It simplifies the analysis of alternatives</p> Signup and view all the answers

    What is the market structure under which the law of supply and demand operates?

    <p>Perfect competition</p> Signup and view all the answers

    What is the purpose of considering all relevant criteria in decision making?

    <p>To select the alternative that best serves the long-term interests of the owners</p> Signup and view all the answers

    What is the equilibrium point in the supply and demand theory?

    <p>The point where the supply is equal to the demand.</p> Signup and view all the answers

    Why is it essential to make risk and uncertainty explicit in decision making?

    <p>To recognize their inherent presence in estimating future outcomes</p> Signup and view all the answers

    What is the law of demand?

    <p>As prices rise, customers buy less.</p> Signup and view all the answers

    What is the characteristic of a good decision-making process?

    <p>It can result in a decision with an undesirable outcome</p> Signup and view all the answers

    What is the definition of a capital good?

    <p>A good used to produce other goods and services.</p> Signup and view all the answers

    What is the definition of a necessity in Engineering Economy?

    <p>A product or service that is required to support human life and activities</p> Signup and view all the answers

    What is the characteristic of a luxury in Engineering Economy?

    <p>It is desired by humans and will be purchased if money is available</p> Signup and view all the answers

    What is the primary goal of the decision maker in evaluating alternatives?

    <p>To select the alternative that best serves the long-term interests of the owners</p> Signup and view all the answers

    What is a characteristic of monopoly?

    <p>One seller and many buyers</p> Signup and view all the answers

    What happens in a natural monopoly market situation?

    <p>Costs are lower under monopoly than under perfect competition</p> Signup and view all the answers

    What is a barrier to entry in a monopoly market?

    <p>Severe barrier to entry</p> Signup and view all the answers

    What is a characteristic of oligopoly?

    <p>Few suppliers of a product or service</p> Signup and view all the answers

    What is a result of perfect competition?

    <p>Reduced prices for buyers and better services from vendors</p> Signup and view all the answers

    What is a characteristic of perfect monopoly?

    <p>The single vendor can prevent the entry of all vendors into the market</p> Signup and view all the answers

    What is an absence of in a perfect competition market?

    <p>Economic friction</p> Signup and view all the answers

    What is the term for goods that satisfy human wants and needs?

    <p>Consumer Goods</p> Signup and view all the answers

    What happens when the supply of a good or service exceeds the demand?

    <p>Surplus</p> Signup and view all the answers

    According to the law of supply, what happens when prices rise?

    <p>Companies increase the supply of goods and services</p> Signup and view all the answers

    What type of demand exists when there is an equal change in price and quantity demanded?

    <p>Unitary Demand</p> Signup and view all the answers

    What is the term for the machinery used in the production of commodities in producer goods?

    <p>Capital Goods</p> Signup and view all the answers

    What is the term for the performance of any duties or work for another?

    <p>Services</p> Signup and view all the answers

    What happens when the demand for a good or service exceeds the supply?

    <p>Shortage</p> Signup and view all the answers

    What is the primary unit of demand in a market?

    <p>Buyer or consumer</p> Signup and view all the answers

    Which of the following factors does NOT influence demand?

    <p>Government Policy</p> Signup and view all the answers

    What is a characteristic of perfect competition?

    <p>Many sellers and many buyers</p> Signup and view all the answers

    Which of the following is NOT a condition of perfect competition?

    <p>Monopoly power</p> Signup and view all the answers

    What is the term for the situation in which the quantity of a product that consumers are willing to buy equals the quantity that producers are willing to supply?

    <p>Market equilibrium</p> Signup and view all the answers

    Which of the following is a factor that influences supply?

    <p>Price of the product</p> Signup and view all the answers

    A man borrowed P20,000 and promised to pay an amount of P21,500 with simple interest of 20%. How many days did it take for him to pay his debt?

    <p>135 days</p> Signup and view all the answers

    If you got a character loan of P10,000 from a bank with 18 percent interest per annum, how much interest would you have paid in one year?

    <p>P1,800</p> Signup and view all the answers

    A man borrowed P25,000 on March 3, 1996, and promised to pay the amount on October 21, 1996, with 15% simple interest. What is the future amount using ordinary interest?

    <p>P27,375.00</p> Signup and view all the answers

    If the future amount is 50 percent more than the principal after 10 months, determine the simple interest rate.

    <p>60%</p> Signup and view all the answers

    Determine the exact simple interest on P5,500.00 for the period from January 10, 1996, to October 28, 1996, at 11% interest.

    <p>P482.68</p> Signup and view all the answers

    A man applied for a loan with 16% interest. The interest will be automatically deducted from the loan at the time the money is released, and after one year will have to pay the same amount as stated in the loan. Determine the interest actually charged to him.

    <p>19.05%</p> Signup and view all the answers

    If the future amount is 25% more than the principal after 8 months, determine the simple interest rate.

    <p>37.5%</p> Signup and view all the answers

    A bank charges 12% simple interest on a P300 loan. How much will be paid if the loan is paid back in one lump sum after three years?

    <p>P408</p> Signup and view all the answers

    P50,000.00 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?

    <p>P5,166.67</p> Signup and view all the answers

    A man deposited P10,000 at 12 percent simple interest. What is the future amount after 5 years and 5 months using ordinary simple interest?

    <p>P16,500</p> Signup and view all the answers

    Fred wanted to buy a refrigerator which will have a price of P13,000 for 90 days from now due to the increase in prices of 12 percent simple interest. What is the present worth of the refrigerator?

    <p>P12,621</p> Signup and view all the answers

    Study Notes

    Demand Influencing Factors

    • Price expectation is a crucial factor influencing consumer demand.
    • The market is defined as the exchange mechanism connecting buyers and sellers.
    • In a perfectly competitive market, each participant is too small to impact market prices.

    Market Structures and Characteristics

    • Sellers are entities that provide products or services for monetary exchange.
    • Products in perfectly competitive markets are homogeneous, meaning they are identical.
    • The law of supply and demand states that prices result from the balance between supply and demand.

    Decision Making and Risk

    • Owners' perspectives primarily drive decision-making processes in businesses.
    • Elastic demand describes a situation where demand changes significantly with price fluctuations.
    • Using a common measurement unit simplifies decision analysis.

    Market Equilibrium

    • The equilibrium point occurs where supply equals demand.
    • Recognizing risk and uncertainty is essential for accurate future outcome estimations.

    Laws of Demand and Supply

    • As prices rise, customers typically buy less, which is known as the law of demand.
    • An effective decision-making process acknowledges uncertainty but does not let it define the outcome.

    Economic Definitions

    • Capital goods are utilized for producing other goods and services.
    • Necessities are essential products or services necessary for human life and activities.
    • Luxuries are non-essential goods desired when finances permit.

    Goals of Decision Makers

    • Decision makers aim for alternatives that serve the long-term interests of owners.
    • Monopolies consist of one seller and multiple buyers, lacking competition.

    Market Dynamics

    • Natural monopolies can lead to lower costs compared to perfect competition due to scale advantages.
    • Barriers to entry in monopolies are often severe, deterring competition.
    • Oligopolies are characterized by a few suppliers dominating the market.

    Results of Market Structures

    • Perfect competition generally leads to lower prices and better services for consumers.
    • Perfect monopoly prevents new vendors from entering due to high entry barriers.
    • In perfect competition, there is an absence of economic frictions.

    Consumer Goods and Market Behavior

    • Consumer goods directly satisfy human wants and needs, contrasting with producer goods.
    • A surplus occurs when supply exceeds demand, while a shortage happens when demand surpasses supply.

    Interest and Financial Calculations

    • Simple interest can be calculated based on principal, rate, and time, allowing for future value assessments.
    • Various scenarios influence outstanding amounts due, factoring in interest rates over specified periods.

    Financial Implications

    • Repayment amounts for loans can be calculated based on simple interest rates and time frames.
    • Present worth calculations help assess future costs based on expected price increases and interest rates.

    Summary Calculations

    • Important financial calculations include determining simple interest amounts based on different scenarios.
    • Understanding interest rates is essential to manage loans effectively and estimate total paybacks.

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    Description

    Test your knowledge on the fundamentals of economics with this quiz. It covers key concepts such as demand influences, market mechanisms, and perfect competition. Perfect for beginners in economics.

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