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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Name: ____________________   Date: ____________

1.Easy

Consumer surplus is:

  1. AThe profit that firms make from selling to consumers at prices above their production costs
  2. BThe difference between what consumers are willing to pay and what they actually pay
  3. CThe total amount consumers spend on a good
  4. DThe amount of goods left unsold at the end of the day
2.Easy

Fiscal policy uses:

  1. ATrade agreements only
  2. BGovernment spending and taxation
  3. CExchange rate controls only
  4. DInterest rates set by the central bank
3.Easy

According to the law of demand, when the price of a normal good rises (other things equal):

  1. AThe quantity demanded falls
  2. BSupply falls
  3. CDemand shifts to the right
  4. DThe quantity demanded rises
4.Medium

A Gini coefficient of 0 indicates:

  1. APerfect equality of income
  2. BZero economic growth
  3. CZero unemployment
  4. DPerfect inequality of income
5.Medium

If demand for a product is price inelastic, a price increase will:

  1. ALeave total revenue unchanged
  2. BDecrease total revenue
  3. CReduce quantity demanded to zero
  4. DIncrease total revenue
6.Medium

Education generates benefits for society beyond the individual student. Without intervention, the market will likely:

  1. AUnder-provide education compared with the social optimum
  2. BOver-provide education compared with the social optimum
  3. CProvide exactly the efficient amount of education, as prices reflect all benefits
  4. DStop providing education altogether
7.Hard

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

  1. AHave no effect on nominal interest rates, so real interest rates fall by about 2 points
  2. BRaise nominal interest rates by about 2 points, leaving real rates unchanged
  3. CRaise real interest rates by about 2 points
  4. DLower nominal interest rates by about 2 points
8.Hard

A deadweight loss represents:

  1. AThe loss of total surplus when output differs from the efficient level
  2. BThe tax revenue collected by the government
  3. CLosses made by firms that are forced to leave the market in the long run
  4. DThe profit of a monopolist

Answer key

  1. 1. B · The difference between what consumers are willing to pay and what they actually pay
  2. 2. B · Government spending and taxation
  3. 3. A · The quantity demanded falls
  4. 4. A · Perfect equality of income
  5. 5. D · Increase total revenue
  6. 6. A · Under-provide education compared with the social optimum
  7. 7. B · Raise nominal interest rates by about 2 points, leaving real rates unchanged
  8. 8. A · The loss of total surplus when output differs from the efficient level

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