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

GDP measures:

  1. AThe government's budget
  2. BThe total market value of final goods and services produced in a country in a period
  3. CThe total wealth and savings held by a country's citizens and firms at the end of a year
  4. DThe value of all exports only
2.Easy

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

  1. AThe quantity demanded rises
  2. BThe quantity demanded falls
  3. CSupply falls
  4. DDemand shifts to the right
3.Easy

A market with only one seller is called:

  1. AAn oligopoly
  2. BA monopoly
  3. CPerfect competition
  4. DA monopsony
4.Medium

Stagflation is a combination of:

  1. AHigh growth and falling prices
  2. BDeflation and rapid growth
  3. CHigh inflation and high unemployment with low growth
  4. DLow inflation and low unemployment
5.Medium

Comparative advantage means a country should specialise in goods it can produce:

  1. AMore cheaply in absolute terms than every other country
  2. BWith the most workers
  3. CAt a lower opportunity cost than other countries
  4. DOnly for its own consumption
6.Medium

In the long run in monopolistic competition, firms typically:

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

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
8.Hard

The Fisher effect predicts that, in the long run, a permanent 2 percentage point rise in expected inflation will:

  1. ARaise nominal interest rates by about 2 points, leaving real rates unchanged
  2. BHave no effect on nominal interest rates, so real interest rates fall by about 2 points
  3. CLower nominal interest rates by about 2 points
  4. DRaise real interest rates by about 2 points

Answer key

  1. 1. B · The total market value of final goods and services produced in a country in a period
  2. 2. B · The quantity demanded falls
  3. 3. B · A monopoly
  4. 4. C · High inflation and high unemployment with low growth
  5. 5. C · At a lower opportunity cost than other countries
  6. 6. C · Earn zero economic profit and have excess capacity
  7. 7. D · It is less costly for high-ability workers to acquire, so it reveals their type
  8. 8. A · Raise nominal interest rates by about 2 points, leaving real rates unchanged

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