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.

New worksheetPractise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________   Date: ____________

1.Easy

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

  1. AAn output level that cannot be reached
  2. BEconomic growth over time
  3. CThe maximum output the economy can produce
  4. DUnemployed or inefficiently used resources
2.Easy

Unemployment caused by people moving between jobs is called:

  1. AFrictional unemployment
  2. BSeasonal unemployment
  3. CCyclical unemployment
  4. DStructural unemployment
3.Easy

Deflation is:

  1. AA reduction in government spending
  2. BA fall in the value of the currency
  3. CA sustained fall in the general price level
  4. DA slowdown in the rate of inflation, with prices still rising
4.Medium

Overfishing in international waters is an example of:

  1. AA natural monopoly
  2. BThe tragedy of the commons
  3. CA Giffen good
  4. DPrice discrimination
5.Medium

In country A, 1 car costs 2 tonnes of wheat to produce; in country B, 1 car costs 4 tonnes of wheat. Which statement is correct?

  1. AB has a comparative advantage in cars and A in wheat
  2. BA has a comparative advantage in both goods
  3. CNeither country gains from trade
  4. DA has a comparative advantage in cars and B in wheat
6.Medium

The marginal propensity to consume is:

  1. AThe share of an extra euro of income that is spent on consumption
  2. BThe average share of total income that households save over a year
  3. CThe interest rate on consumer loans
  4. DThe total consumption in an economy
7.Hard

The "convergence hypothesis" from the Solow model predicts that:

  1. ARich countries always grow faster than poor ones, because they have more capital
  2. BExchange rates converge to a fixed value
  3. CPoorer countries with similar fundamentals tend to grow faster than richer ones
  4. DAll countries will eventually have the same population
8.Hard

Purchasing power parity (PPP) suggests that, in the long run, exchange rates adjust so that:

  1. AInterest rates are equal in all countries
  2. BTrade balances are always zero
  3. CEvery currency ends up having the same nominal value as the US dollar
  4. DThe same basket of goods costs the same in different countries

Answer key

  1. 1. D · Unemployed or inefficiently used resources
  2. 2. A · Frictional unemployment
  3. 3. C · A sustained fall in the general price level
  4. 4. B · The tragedy of the commons
  5. 5. D · A has a comparative advantage in cars and B in wheat
  6. 6. A · The share of an extra euro of income that is spent on consumption
  7. 7. C · Poorer countries with similar fundamentals tend to grow faster than richer ones
  8. 8. D · The same basket of goods costs the same in different countries

Full step-by-step solutions: practise this topic on examproblems.com.