Economics concepts worksheet with answers

A market with only one seller is called:

1. AAn oligopoly
2. BA monopsony
3. CPerfect competition
4. DA monopoly

Price elasticity of demand measures:

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

Which statement is a normative statement?

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

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. AB has a comparative advantage in cars and A in wheat
2. BA has a comparative advantage in both goods
3. CA has a comparative advantage in cars and B in wheat
4. DNeither country gains from trade

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

1. ADisinflation
2. BDeflation
3. CDemand-pull inflation
4. DCost-push inflation

The marginal propensity to consume is:

1. AThe share of an extra euro of income that is spent on consumption
2. BThe average share of total income that households save over a year
3. CThe total consumption in an economy
4. DThe interest rate on consumer loans

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

1. A70 years
2. B7 years
3. C49 years
4. D10 years

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

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