Economics concepts worksheet with answers

Free printable Economics concepts worksheet: 8 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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1.Easy

A cartel is:

  1. AA single firm that controls the whole market for a product or service
  2. BA group of firms that agree to coordinate prices or output
  3. CA government agency that regulates prices
  4. DA trade union that negotiates wages
2.Easy

Which statement is a normative statement?

  1. AHigher prices reduce quantity demanded
  2. BThe minimum wage rose by 3% last year
  3. CThe government should raise the minimum wage
  4. DUnemployment fell to 4% in June
3.Easy

If supply increases while demand stays the same, the equilibrium price will usually:

  1. ARise
  2. BStay exactly the same
  3. CBecome zero
  4. DFall
4.Medium

A currency depreciation tends to:

  1. AMake imports cheaper
  2. BHave no effect on trade
  3. CReduce the price of all domestic goods and make imports cheaper
  4. DMake exports cheaper abroad and imports more expensive
5.Medium

A negative externality occurs when:

  1. AA firm makes a loss
  2. BConsumers pay more for a product than it costs the firm to produce
  3. CA third party bears a cost not paid by the producer or consumer
  4. DThe government taxes a product
6.Medium

Education generates benefits for society beyond the individual student. Without intervention, the market will likely:

  1. AUnder-provide education compared with the social optimum
  2. BOver-provide education compared with the social optimum
  3. CProvide exactly the efficient amount of education, as prices reflect all benefits
  4. DStop providing education altogether
7.Hard

A Giffen good is one where:

  1. ADemand rises because the good is a status symbol
  2. BThe price never changes
  3. CDemand rises with income, like most goods
  4. DQuantity demanded rises when its price rises, because a strong income effect outweighs the substitution effect
8.Hard

Why does the deadweight loss of a tax grow when the good's demand and supply are more elastic?

  1. AElastic markets have no consumer surplus
  2. BThe government collects more tax revenue
  3. CQuantity traded falls more, so more mutually beneficial trades are lost
  4. DPrices do not change, so consumers bear the whole burden of the tax instead

Answer key

  1. 1. B · A group of firms that agree to coordinate prices or output
  2. 2. C · The government should raise the minimum wage
  3. 3. D · Fall
  4. 4. D · Make exports cheaper abroad and imports more expensive
  5. 5. C · A third party bears a cost not paid by the producer or consumer
  6. 6. A · Under-provide education compared with the social optimum
  7. 7. D · Quantity demanded rises when its price rises, because a strong income effect outweighs the substitution effect
  8. 8. C · Quantity traded falls more, so more mutually beneficial trades are lost

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