Economics concepts worksheet with answers

Which list gives the four traditional factors of production?

1. ASupply, demand, price and quantity
2. BWages, rent, interest and profit
3. CMoney, labour, shares and land
4. DLand, labour, capital and entrepreneurship

A market with only one seller is called:

1. APerfect competition
2. BA monopsony
3. CA monopoly
4. DAn oligopoly

A tariff is:

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

The income elasticity of demand for a good is -0.4. The good is:

1. AA luxury good
2. BAn inferior good
3. CA complement
4. DA normal necessity

Using the expenditure approach, GDP equals:

1. AC − I + G − (X + M)
2. BC + I + G + (X − M)
3. CC + I + G + X + M
4. DWages + profits − taxes

A per-unit tax is placed on a good with very inelastic demand and elastic supply. Who bears most of the tax burden?

1. AConsumers
2. BProducers
3. CThe government
4. DIt is always split equally

A regulator forces a natural monopoly to set price equal to marginal cost. The likely problem is that:

1. AThe firm makes a loss because average cost is above marginal cost
2. BConsumers face a shortage, because demand exceeds supply at that price
3. CThe firm makes very large profits
4. DOutput falls below the monopoly level

In the Solow growth model, sustained long-run growth in output per worker comes from:

1. APopulation growth
2. BA higher saving rate alone
3. CGovernment budget deficits
4. DTechnological progress