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

Fiscal policy uses:

  1. AGovernment spending and taxation
  2. BTrade agreements only
  3. CInterest rates set by the central bank
  4. DExchange rate controls only
2.Easy

The phrase "ceteris paribus" means:

  1. AOther things being equal
  2. BThe price is fixed
  3. CSupply equals demand
  4. DThe government does not intervene
3.Easy

A tariff is:

  1. AA limit on the quantity of imports
  2. BA ban on all foreign trade
  3. CA tax on imported goods
  4. DA subsidy for exporters
4.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. ANeither country gains from trade
  2. BA has a comparative advantage in both goods
  3. CB has a comparative advantage in cars and A in wheat
  4. DA has a comparative advantage in cars and B in wheat
5.Medium

A sharp rise in world oil prices leading to higher inflation is an example of:

  1. ADemand-pull inflation
  2. BDeflation
  3. CDisinflation
  4. DCost-push inflation
6.Medium

A Nash equilibrium is a situation where:

  1. ANo player can improve their payoff by changing strategy alone, given the others' strategies
  2. BAll players achieve the highest possible total payoff
  3. CThe players agree to cooperate through a binding contract that maximises their combined total payoff
  4. DOne player has won and the others have lost
7.Hard

Which is a key difference between the CPI and the GDP deflator?

  1. AThe CPI includes prices of imported consumer goods; the GDP deflator covers only domestically produced goods
  2. BThe CPI covers investment goods; the GDP deflator does not
  3. CThey always give exactly the same inflation rate
  4. DThe GDP deflator includes imported goods; the CPI does not
8.Hard

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

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

Answer key

  1. 1. A · Government spending and taxation
  2. 2. A · Other things being equal
  3. 3. C · A tax on imported goods
  4. 4. D · A has a comparative advantage in cars and B in wheat
  5. 5. D · Cost-push inflation
  6. 6. A · No player can improve their payoff by changing strategy alone, given the others' strategies
  7. 7. A · The CPI includes prices of imported consumer goods; the GDP deflator covers only domestically produced goods
  8. 8. D · Q = 40, P = 60

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