Economics concepts worksheet with answers

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

1. AGreater than 1
2. BLess than 1
3. CExactly 0
4. DExactly 1

Fiscal policy uses:

1. AGovernment spending and taxation
2. BInterest rates set by the central bank
3. CExchange rate controls only
4. DTrade agreements only

Which statement is a normative statement?

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

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

1. A95%
2. B5.3%
3. C50%
4. D5%

Both supply and demand for a good increase. What can we say for certain about the new equilibrium?

1. ABoth price and quantity rise
2. BBoth price and quantity fall
3. CQuantity rises, but the change in price is uncertain
4. DPrice rises, but the change in quantity is uncertain

Rising consumer confidence would most likely:

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

A monopolist maximises profit where:

1. AMarginal revenue equals marginal cost
2. BPrice equals marginal cost
3. CAverage cost is at its minimum
4. DTotal revenue is at its maximum

In the Solow growth model, sustained long-run growth in output per worker comes from:

1. ATechnological progress
2. BA higher saving rate alone
3. CGovernment budget deficits
4. DPopulation growth