Economics concepts worksheet with answers

Unemployment caused by people moving between jobs is called:

1. ACyclical unemployment
2. BSeasonal unemployment
3. CFrictional unemployment
4. DStructural unemployment

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

1. AAll factors of production can be varied
2. BAt least one factor of production is fixed
3. CPrices cannot change
4. DThe firm must make a loss

The basic economic problem of scarcity means that:

1. APrices are always rising over time
2. BSome goods are always unavailable in shops because firms produce too little
3. COnly poor countries need to make choices
4. DWants are unlimited but resources to satisfy them are limited

Rising consumer confidence would most likely:

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

A Gini coefficient of 0 indicates:

1. APerfect equality of income
2. BZero unemployment
3. CZero economic growth
4. DPerfect inequality of income

A price ceiling set below the equilibrium price typically causes:

1. ANo change in the market
2. BA surplus
3. CAn increase in supply
4. DA shortage

The Lerner index (P − MC)/P for a profit-maximising monopolist equals 1/|PED|. If |PED| = 4, the price is:

1. AEqual to marginal cost
2. B25% above marginal cost, as a share of price
3. C75% above marginal cost, as a share of price
4. D4 times marginal cost

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

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