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Economics Practice Tests

These Grade 12 Social Studies practice tests develop Economics skills through scarcity, opportunity cost, production, markets, supply and demand, market structures, labor, public policy, externalities, international trade, and economic indicators.

Skills covered

  • Explaining scarcity, opportunity cost, factors of production, production possibilities, marginal analysis, incentives, economic systems, circular flow, GDP, and real GDP
  • Applying the laws of demand and supply, equilibrium, shortages, surpluses, demand and supply shifts, price controls, and elasticity
  • Comparing perfect competition, monopoly, oligopoly, monopolistic competition, barriers to entry, labor demand, human capital, minimum wage, unions, and income distribution
  • Evaluating externalities, public goods, common resources, tax incidence, progressive taxation, fiscal policy, market failure, regulation, and cost-benefit analysis
  • Analyzing comparative and absolute advantage, tariffs, quotas, exchange rates, trade balance, inflation, unemployment, interest, and consumer protection

How to use these practice tests

Identify the scarce resource or market relationship first. Then trace the incentive, curve shift, policy effect, opportunity cost, or economic indicator and check whether the conclusion follows from the model.

For more Grade 12 Social Studies practice, return to the Grade 12 Social Studies category.

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2. Test

Grade 12 Economics Practice Tests

Practice Grade 12 Social Studies questions about scarcity, opportunity cost, production, markets, supply and demand, labor, public policy, externalities, trade, and economic indicators.

Choose the best answer. Identify the scarce resource, incentive, market relationship, policy tool, or economic indicator and consider the relevant tradeoff.

10 Questions
0/10 Questions0 %
Correct 0
Incorrect 0
Unanswered 10
1. QuestionMultiple choice

What does the law of demand state?

Please select an answer first.

Correct answer: A

The correct answer is As price rises, quantity demanded generally falls, holding other factors constant.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: The inverse relationship reflects substitution and income effects under the ceteris paribus assumption.
  3. Connect choice and tradeoffs: The correct answer is As price rises, quantity demanded generally falls, holding other factors constant.

The inverse relationship reflects substitution and income effects under the ceteris paribus assumption.

2. QuestionMultiple choice

What does the law of supply state?

Please select an answer first.

Correct answer: B

The correct answer is As price rises, quantity supplied generally rises, holding other factors constant.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: Higher prices can make additional production more profitable, encouraging firms to supply more.
  3. Connect choice and tradeoffs: The correct answer is As price rises, quantity supplied generally rises, holding other factors constant.

Higher prices can make additional production more profitable, encouraging firms to supply more.

3. QuestionMultiple choice

What is market equilibrium?

Please select an answer first.

Correct answer: C

The correct answer is The price and quantity at which quantity demanded equals quantity supplied.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: At equilibrium, planned purchases and planned sales match, absent a shift or intervention.
  3. Connect choice and tradeoffs: The correct answer is The price and quantity at which quantity demanded equals quantity supplied.

At equilibrium, planned purchases and planned sales match, absent a shift or intervention.

4. QuestionMultiple choice

What is a shortage?

Please select an answer first.

Correct answer: D

The correct answer is A situation in which quantity demanded exceeds quantity supplied at a given price.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: A binding price below equilibrium can create a shortage because buyers want more than sellers provide.
  3. Connect choice and tradeoffs: The correct answer is A situation in which quantity demanded exceeds quantity supplied at a given price.

A binding price below equilibrium can create a shortage because buyers want more than sellers provide.

5. QuestionMultiple choice

What is a surplus?

Please select an answer first.

Correct answer: A

The correct answer is A situation in which quantity supplied exceeds quantity demanded at a given price.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: A price above equilibrium can leave unsold goods because sellers provide more than buyers purchase.
  3. Connect choice and tradeoffs: The correct answer is A situation in which quantity supplied exceeds quantity demanded at a given price.

A price above equilibrium can leave unsold goods because sellers provide more than buyers purchase.

6. QuestionMultiple choice

What would an increase in consumer income typically do to demand for a normal good?

Please select an answer first.

Correct answer: B

The correct answer is Shift the demand curve to the right.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: For a normal good, higher income increases willingness and ability to buy at each price.
  3. Connect choice and tradeoffs: The correct answer is Shift the demand curve to the right.

For a normal good, higher income increases willingness and ability to buy at each price.

7. QuestionMultiple choice

What would a decrease in production costs typically do?

Please select an answer first.

Correct answer: C

The correct answer is Shift the supply curve to the right.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: Lower input costs increase profitability and allow firms to supply more at each price.
  3. Connect choice and tradeoffs: The correct answer is Shift the supply curve to the right.

Lower input costs increase profitability and allow firms to supply more at each price.

8. QuestionMultiple choice

What is a price ceiling?

Please select an answer first.

Correct answer: D

The correct answer is A legal maximum price.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: A binding price ceiling below equilibrium can make a good more affordable for some buyers but create a shortage.
  3. Connect choice and tradeoffs: The correct answer is A legal maximum price.

A binding price ceiling below equilibrium can make a good more affordable for some buyers but create a shortage.

9. QuestionMultiple choice

What is a price floor?

Please select an answer first.

Correct answer: A

The correct answer is A legal minimum price.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: A binding price floor above equilibrium can support seller prices but create a surplus.
  3. Connect choice and tradeoffs: The correct answer is A legal minimum price.

A binding price floor above equilibrium can support seller prices but create a surplus.

10. QuestionMultiple choice

What does price elasticity of demand measure?

Please select an answer first.

Correct answer: B

The correct answer is How responsive quantity demanded is to a change in price.

  1. Identify the economics concept: Determine whether the question concerns scarcity, incentives, markets, production, labor, public policy, international trade, or economic indicators.
  2. Apply the economic model: Price elasticity compares the percentage change in quantity demanded with the percentage change in price.
  3. Connect choice and tradeoffs: The correct answer is How responsive quantity demanded is to a change in price.

Price elasticity compares the percentage change in quantity demanded with the percentage change in price.

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