Economics concepts worksheet with answers

Which list gives the four traditional factors of production?

1. AMoney, labour, shares and land
2. BSupply, demand, price and quantity
3. CWages, rent, interest and profit
4. DLand, labour, capital and entrepreneurship

The unemployment rate is calculated as:

1. AThe number of unemployed divided by the labour force
2. BThe number of unemployed divided by the total population
3. CThe number of employed divided by the labour force
4. DThe number of job vacancies divided by the population

According to the law of demand, when the price of a normal good rises (other things equal):

1. ASupply falls
2. BDemand shifts to the right
3. CThe quantity demanded rises
4. DThe quantity demanded falls

Rising consumer confidence would most likely:

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

A sharp rise in world oil prices leading to higher inflation is an example of:

1. ADemand-pull inflation
2. BDisinflation
3. CCost-push inflation
4. DDeflation

In the long run in monopolistic competition, firms typically:

1. AEarn zero economic profit and have excess capacity
2. BProduce at the minimum of average total cost
3. CEarn large economic profits protected by entry barriers
4. DCharge a price equal to marginal cost

According to the quantity theory of money (MV = PY), if velocity and real output are constant, a 5% rise in the money supply leads to:

1. AAbout a 5% rise in the price level
2. BA 5% fall in velocity
3. CNo change in prices
4. DAbout a 5% rise in real output

According to prospect theory (Kahneman and Tversky), people typically:

1. AFeel losses more strongly than equal-sized gains
2. BPrefer risk when facing gains of any size
3. CTreat losses and gains of the same size as equally important
4. DAlways maximise expected monetary value