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

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. CA temporary fall in aggregate demand
  4. DThe normal time that workers take to search for and move between jobs
2.Easy

A point inside a country's production possibility frontier shows:

  1. AEconomic growth over time
  2. BThe maximum output the economy can produce
  3. CUnemployed or inefficiently used resources
  4. DAn output level that cannot be reached
3.Easy

Demand is called "price elastic" when the absolute value of its price elasticity is:

  1. AExactly 0
  2. BLess than 1
  3. CGreater than 1
  4. DExactly 1
4.Medium

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

  1. ACost-push inflation
  2. BDeflation
  3. CDemand-pull inflation
  4. DDisinflation
5.Medium

The law of diminishing marginal returns states that:

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

The principle of diminishing marginal utility states that:

  1. AConsumers always prefer more expensive goods
  2. BExtra satisfaction from each additional unit consumed tends to fall
  3. CSatisfaction rises as income falls
  4. DTotal satisfaction falls with each additional unit of the good that is consumed
7.Hard

A liquidity trap is a situation where:

  1. ABanks have no money left to lend
  2. BInflation is very high and rising
  3. CThe central bank raises interest rates sharply to fight high and rapidly rising inflation
  4. DInterest rates are near zero and further monetary expansion has little effect on demand
8.Hard

A Giffen good is one where:

  1. AQuantity demanded rises when its price rises, because a strong income effect outweighs the substitution effect
  2. BDemand rises with income, like most goods
  3. CDemand rises because the good is a status symbol
  4. DThe price never changes

Answer key

  1. 1. A · A mismatch between workers' skills or location and the jobs available
  2. 2. C · Unemployed or inefficiently used resources
  3. 3. C · Greater than 1
  4. 4. A · Cost-push inflation
  5. 5. C · Adding more of a variable input to a fixed input eventually lowers the extra output per unit added
  6. 6. B · Extra satisfaction from each additional unit consumed tends to fall
  7. 7. D · Interest rates are near zero and further monetary expansion has little effect on demand
  8. 8. A · Quantity demanded rises when its price rises, because a strong income effect outweighs the substitution effect

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