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.

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1.Easy

What is opportunity cost?

  1. AThe value of the best alternative given up when making a choice
  2. BThe total money spent on a purchase, including any taxes and fees
  3. CThe cost of starting a new business
  4. DThe price of a product during a sale
2.Easy

Marginal cost is:

  1. ATotal cost divided by the total number of units produced
  2. BThe cost of the firm's buildings and machines
  3. CThe extra cost of producing one more unit of output
  4. DThe lowest price a firm can charge
3.Easy

Two goods are complements if:

  1. ADemand for both rises when the price of either one of them rises
  2. BThey have the same price
  3. CA rise in the price of one reduces demand for the other
  4. DOne can easily replace the other
4.Medium

A public good is:

  1. ANon-rival and non-excludable
  2. BProvided only by private firms
  3. CRival and excludable
  4. DAny good bought by the government
5.Medium

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

  1. AQuantity rises, but the change in price is uncertain
  2. BBoth price and quantity rise
  3. CBoth price and quantity fall
  4. DPrice rises, but the change in quantity is uncertain
6.Medium

A firm has spent €1 million on research for a product that now looks unprofitable. When deciding whether to continue, the €1 million should be:

  1. AAdded to the expected future costs
  2. BRecovered by raising prices
  3. CIgnored, because it is a sunk cost
  4. DTreated as the opportunity cost of stopping
7.Hard

Akerlof's "market for lemons" explains how:

  1. APublic goods are under-provided
  2. BAsymmetric information can drive good-quality products out of a market
  3. CMonopolies set high prices
  4. DLemons become cheaper in summer
8.Hard

The Fisher effect predicts that, in the long run, a permanent 2 percentage point rise in expected inflation will:

  1. ALower nominal interest rates by about 2 points
  2. BRaise nominal interest rates by about 2 points, leaving real rates unchanged
  3. CHave no effect on nominal interest rates, so real interest rates fall by about 2 points
  4. DRaise real interest rates by about 2 points

Answer key

  1. 1. A · The value of the best alternative given up when making a choice
  2. 2. C · The extra cost of producing one more unit of output
  3. 3. C · A rise in the price of one reduces demand for the other
  4. 4. A · Non-rival and non-excludable
  5. 5. A · Quantity rises, but the change in price is uncertain
  6. 6. C · Ignored, because it is a sunk cost
  7. 7. B · Asymmetric information can drive good-quality products out of a market
  8. 8. B · Raise nominal interest rates by about 2 points, leaving real rates unchanged

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