Economics concepts worksheet with answers

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

The basic economic problem of scarcity means that:

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

Real GDP differs from nominal GDP because real GDP:

1. AIs adjusted for changes in the price level
2. BExcludes government spending
3. CIs measured in a foreign currency
4. DIncludes only goods, not services

The price of petrol rises sharply. What happens to the demand curve for large cars?

1. AIt shifts to the right
2. BThere is a movement along it
3. CIt shifts to the left
4. DIt becomes vertical

A country has 950 employed people and 50 unemployed people seeking work. Its unemployment rate is:

1. A50%
2. B5%
3. C95%
4. D5.3%

Education generates benefits for society beyond the individual student. Without intervention, the market will likely:

1. AOver-provide education compared with the social optimum
2. BUnder-provide education compared with the social optimum
3. CProvide exactly the efficient amount of education, as prices reflect all benefits
4. DStop providing education altogether

The "Taylor principle" says that, to stabilise inflation, a central bank should respond to a 1 percentage point rise in inflation by:

1. ACutting the nominal rate
2. BRaising the nominal interest rate, but by less than 1 percentage point
3. CKeeping the nominal rate unchanged
4. DRaising the nominal interest rate by more than 1 percentage point

Price discrimination by a firm requires that:

1. AIt operates in perfect competition
2. BIts costs differ for each customer
3. CIt has market power, can separate markets and prevent resale
4. DAll consumers have identical elasticity of demand and buy the same amount