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

The unemployment rate is calculated as:

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

Structural unemployment is caused by:

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

In economics, the short run is a period in which:

  1. AAt least one factor of production is fixed
  2. BThe firm must make a loss
  3. CAll factors of production can be varied
  4. DPrices cannot change
4.Medium

The principle of diminishing marginal utility states that:

  1. AConsumers always prefer more expensive goods
  2. BTotal satisfaction falls with each additional unit of the good that is consumed
  3. CSatisfaction rises as income falls
  4. DExtra satisfaction from each additional unit consumed tends to fall
5.Medium

The marginal cost curve cuts the average total cost curve:

  1. AAt the maximum point of average total cost
  2. BNever, as the two curves are parallel
  3. CAt the minimum point of average total cost
  4. DWhere average total cost equals zero
6.Medium

If the ECB raises its main interest rate, the most likely short-term effect is:

  1. AAn immediate rise in GDP
  2. BLower borrowing and spending, reducing inflationary pressure
  3. CA fall in the value of the euro
  4. DHigher borrowing and spending, which adds to inflationary pressure
7.Hard

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

  1. ATechnological progress
  2. BGovernment budget deficits
  3. CPopulation growth
  4. DA higher saving rate alone
8.Hard

Why is the real-world government spending multiplier usually smaller than the simple 1/(1 − MPC)?

  1. AThe MPC is always above 1
  2. BConsumers never spend extra income
  3. CGovernments cannot borrow money
  4. DTaxes, imports and crowding out leak part of each round of spending

Answer key

  1. 1. D · The number of unemployed divided by the labour force
  2. 2. D · A mismatch between workers' skills or location and the jobs available
  3. 3. A · At least one factor of production is fixed
  4. 4. D · Extra satisfaction from each additional unit consumed tends to fall
  5. 5. C · At the minimum point of average total cost
  6. 6. B · Lower borrowing and spending, reducing inflationary pressure
  7. 7. A · Technological progress
  8. 8. D · Taxes, imports and crowding out leak part of each round of spending

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