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Economics

Total questions: 27

Worksheet time: 15mins

Name
Class
Date
1.

The core problem in economics study is

a)

Money

b)

Scarcity

c)

Production

d)

Allocation

2.

Which of the following statement is about microeconomics?

a)

The growth increased by 5.0 percent last year

b)

Inflation is about to increased 3.6 percent this year

c)

The factors of production is limited resources

d)

The general price level increased by 4 percent last year

3.

“In order to save cost, the “Food Industry” should use more labor than machines.”This statement refers to

a)

What to produce?

b)

How to produce?

c)

How many to produce?

d)

None of the above

4.

What to produce in Mixed Economy refers to:

a)

Public goods

b)

Private goods

c)

Intermediate goods

d)

Public and private goods

5.

There are 4 _______________. They are land, labor, capital and entrepreneurship.

a)

Factors of Production

b)

Market Economy

c)

Profit

d)

Economics

6.

Tools used by people at work like assembly lines, or a hammer, or a ladder are called _______________.

a)

Labor

b)

Capital

c)

Revenue

7.
What is the best example of scarcity
a)
The restuarant is not crowded tonight 
b)
The school parking lot only has 150 spaces but 200 students want to park there
c)
There are 500 houses in the subdivision and 250 of them are occupied
d)
A person decided to dye her hair blonde instead of red
8.
What is a high price a signal for?
a)
government to enact price controls
b)
producers to offer less & consumers to buy more
c)
producers to offer more & consumers to buy less
d)
suppliers to reduce sales until prices peak
9.

services provided by people

a)

human resource

b)

import

c)

scarcity

d)

consumer

10.
What term refers to a good that comes into a country?
a)
Trade
b)
Migration
c)
Export
d)
Import
11.
What term refers to a good that leaves a country?
a)
Export
b)
Import
c)
Trade
d)
Distribution
12.
What economy is where the government has total control of the economy. Businesses are not privately owned.
a)
Command
b)
Traditional
c)
Mixed
d)
Market
13.

A situation where one party to a transaction has a better information than the other party

a)

risk-seeking

b)

market signaling

c)

assymetric information

d)

adverse selection

14.
Which of the following is true when there are negative externalities associated with the production of a good? 
a)
The market will adjust automatically to equate marginal social costs and marginal social benefits. 
b)
Marginal social costs will exceed marginal private costs unless businesses are forced to internalize the external costs. 
c)
Marginal private costs will exceed marginal social costs, but the government can correct the problem. 
d)
Producers should be subsidized so that they will produce more of the good. 
15.

Markets exhibiting negative externalities will

a)

under produce.

b)

over produce.

c)

be optimal.

16.

Driving a car on crowded highway produces

a)

a negative externality.

b)

a positive externality.

17.

Apartment dwellers who buy fire alarms or fire extinguishers generate a

a)

negative externality.

b)

positive externality.

18.

The market should produce the quantity where

a)

marginal social cost equals marginal social benefit.

b)

marginal private cost equals marginal social benefit.

c)

external cost equals external benefit.

d)

private cost is greater than social cost.

19.

A negative externality results due to firms

a)

being very, very , bad.

b)

not paying the full cost of production.

c)

firms internalizing production costs.

d)

firms not realizing they are polluting.

20.
A ______ Externality occurs when a cost of production or consumption falls on a 3rd Party.
a)
Negative
b)
Neutral
c)
Positive
21.

The shaded triangle on the diagram shows

a)

the DWL of overproduction.

b)

the impact of a positive externality.

c)

the DWL of underproduction.

d)

consumer surplus.

22.

Marginal Social Cost minus Marginal Private Cost equals

a)

internal cost.

b)

external cost.

c)

marginal cost.

d)

marginal revenue.

23.
A public good is
a)
Anything non-rivalrous and non-excludable
b)
Anything all citizens value
c)
Anything produced by the government
d)
Anything with a positive externality
24.
For a merit good...
a)
MPB is less than MSB
b)
MSB is less than MPB
c)
MPC=MSC
d)
MPB=MSB
25.
The 'Tragedy of the Commons' is illustrated by...
a)
Over-fishing
b)
Provision of lighthouses
c)
Public libraries
d)
Shortage of rental accommodation
26.
The free-rider problem is an issue relating to...
a)
Public goods
b)
Merit goods
c)
Demerit goods
d)
None of these
27.
Government policy solutions to reduce the consumption of demerit goods include:
a)
Increasing excise duty
b)
Decreasing income tax
c)
Decreasing corporation tax
d)
Increasing subsidies