Economics concepts worksheet with answers

Macroeconomics studies:

1. AThe decisions of individual households and firms in particular markets
2. BOnly the stock market
3. CThe accounts of a single company
4. DThe economy as a whole, such as inflation, unemployment and growth

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

Which statement is a normative statement?

1. AUnemployment fell to 4% in June
2. BHigher prices reduce quantity demanded
3. CThe minimum wage rose by 3% last year
4. DThe government should raise the minimum wage

Comparative advantage means a country should specialise in goods it can produce:

1. AOnly for its own consumption
2. BMore cheaply in absolute terms than every other country
3. CWith the most workers
4. DAt a lower opportunity cost than other countries

A minimum wage set above the equilibrium wage in a competitive labour market is predicted to cause:

1. AA shortage of labour
2. BNo change in employment
3. CA surplus of labour (unemployment)
4. DA fall in the wage rate

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. BProvide exactly the efficient amount of education, as prices reflect all benefits
3. CUnder-provide education compared with the social optimum
4. DStop providing education altogether

In the "Battle of the Sexes" coordination game, how many pure-strategy Nash equilibria are there?

1. ANone
2. BOne
3. CTwo
4. DFour

In the Bertrand model, two firms sell identical products with the same constant marginal cost and compete on price. The equilibrium price is:

1. AHalfway between monopoly price and marginal cost
2. BEqual to marginal cost
3. CThe monopoly price
4. DZero