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

Consumer surplus is:

  1. AThe amount of goods left unsold at the end of the day
  2. BThe difference between what consumers are willing to pay and what they actually pay
  3. CThe total amount consumers spend on a good
  4. DThe profit that firms make from selling to consumers at prices above their production costs
2.Easy

A common rule of thumb defines a recession as:

  1. AAny month with rising unemployment
  2. BTwo consecutive quarters of falling real GDP
  3. CA year with inflation above 5%
  4. DA fall in the stock market of 10%
3.Easy

Structural unemployment is caused by:

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

The law of diminishing marginal returns states that:

  1. AConsumers get less satisfaction as prices rise
  2. BLong-run average costs always fall as output rises
  3. CAdding more of a variable input to a fixed input eventually lowers the extra output per unit added
  4. DTotal output always falls as more workers are hired
5.Medium

A currency depreciation tends to:

  1. AMake imports cheaper
  2. BMake exports cheaper abroad and imports more expensive
  3. CHave no effect on trade
  4. DReduce the price of all domestic goods and make imports cheaper
6.Medium

A negative externality occurs when:

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

For a normal good, when its price falls, the substitution effect and income effect:

  1. ABoth increase the quantity demanded
  2. BCancel out exactly
  3. CWork in opposite directions
  4. DBoth decrease the quantity demanded
8.Hard

The "convergence hypothesis" from the Solow model predicts that:

  1. ARich countries always grow faster than poor ones, because they have more capital
  2. BPoorer countries with similar fundamentals tend to grow faster than richer ones
  3. CAll countries will eventually have the same population
  4. DExchange rates converge to a fixed value

Answer key

  1. 1. B · The difference between what consumers are willing to pay and what they actually pay
  2. 2. B · Two consecutive quarters of falling real GDP
  3. 3. A · A mismatch between workers' skills or location and the jobs available
  4. 4. C · Adding more of a variable input to a fixed input eventually lowers the extra output per unit added
  5. 5. B · Make exports cheaper abroad and imports more expensive
  6. 6. A · A third party bears a cost not paid by the producer or consumer
  7. 7. A · Both increase the quantity demanded
  8. 8. B · Poorer countries with similar fundamentals tend to grow faster than richer ones

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