Economics concepts worksheet with answers

Structural unemployment is caused by:

1. AThe normal time that workers take to search for and move between jobs
2. BSeasonal changes in demand for labour
3. CA mismatch between workers' skills or location and the jobs available
4. DA temporary fall in aggregate demand

Real GDP differs from nominal GDP because real GDP:

1. AIncludes only goods, not services
2. BIs adjusted for changes in the price level
3. CIs measured in a foreign currency
4. DExcludes government spending

A tariff is:

1. AA ban on all foreign trade
2. BA tax on imported goods
3. CA limit on the quantity of imports
4. DA subsidy for exporters

A Nash equilibrium is a situation where:

1. AAll players achieve the highest possible total payoff
2. BThe players agree to cooperate through a binding contract that maximises their combined total payoff
3. COne player has won and the others have lost
4. DNo player can improve their payoff by changing strategy alone, given the others' strategies

A price ceiling set below the equilibrium price typically causes:

1. ANo change in the market
2. BA surplus
3. CA shortage
4. DAn increase in supply

Rising consumer confidence would most likely:

1. AShift aggregate demand to the right
2. BShift aggregate demand to the left
3. CShift aggregate supply to the left
4. DHave no effect on the economy

In Spence's job market signalling model, education can be valuable to employers even if it does not raise productivity because:

1. AIt reduces the wages employers must pay
2. BEmployers are required by law to hire graduates
3. CIt guarantees that every graduate is highly productive
4. DIt is less costly for high-ability workers to acquire, so it reveals their type

Akerlof's "market for lemons" explains how:

1. APublic goods are under-provided
2. BMonopolies set high prices
3. CAsymmetric information can drive good-quality products out of a market
4. DLemons become cheaper in summer