Economics concepts worksheet with answers

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

1. ALess than 1
2. BGreater than 1
3. CExactly 1
4. DExactly 0

The unemployment rate is calculated as:

1. AThe number of unemployed divided by the total population
2. BThe number of unemployed divided by the labour force
3. CThe number of job vacancies divided by the population
4. DThe number of employed divided by the labour force

Price elasticity of demand measures:

1. AHow much firms can raise their prices
2. BHow responsive quantity supplied is to changes in consumer income
3. CHow responsive quantity demanded is to a change in price
4. DHow quickly prices change over time

A Gini coefficient of 0 indicates:

1. AZero economic growth
2. BPerfect equality of income
3. CZero unemployment
4. DPerfect inequality of income

A country imposes a tariff on imported steel. Which effect is most likely?

1. ADomestic steel prices rise and domestic production increases
2. BThe world price of steel rises sharply for all countries that trade it
3. CDomestic consumers gain surplus
4. DDomestic steel prices fall and imports rise

Rising consumer confidence would most likely:

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

Using the "rule of 70", an economy growing at 7% per year will double its real GDP in about:

1. A49 years
2. B10 years
3. C7 years
4. D70 years

A monopolist faces demand P = 100 − Q and has constant marginal cost of 20. What are its profit-maximising output and price?

1. AQ = 40, P = 20
2. BQ = 40, P = 60
3. CQ = 50, P = 50
4. DQ = 80, P = 20