WGU D089 PRINCIPLES OF ECONOMICS 2026
EXAMINATION QUESTIONS AND ANSWERS SURE A+
✔✔When does the Production Possibilities Frontier (PPF) have a bowed-out shape
caused by increasing opportunity cost? - ✔✔When the factors of production are
heterogeneous
✔✔On the production possibilities frontier, what must be sacrificed to produce more of
one good? - ✔✔The production of the other good
✔✔What can shift the production possibilities frontier outward, making what was
previously unattainable attainable? - ✔✔Technological advances, an increase in
resource quality or quantity, and an increase in trade
✔✔What happens if the source of inefficiency is eliminated? - ✔✔Production can be
increased.
✔✔What happens when a circumstance such as excessive unemployment results in a
country producing less than it could from its available resources? - ✔✔An inefficient
outcome occurs
✔✔What is a situational decision in which you lose one quality, quantity, or property in
return for gaining something else called? - ✔✔Trade-off
✔✔What must be thoroughly evaluated to make a trade-off decision? - ✔✔The marginal
benefits and marginal costs of each option.
✔✔What forces you to make trade-offs? - ✔✔Scarcity
✔✔If the inputs of production are underutilized, is a decrease in production of the other
good required when increasing production to the point that the output combinations sit
on the production possibilities frontier? - ✔✔No
✔✔How is opportunity cost calculated? - ✔✔By dividing the amount of a good you have
given up by the amount of the good you have gained.
✔✔How does opportunity cost appear along a linear production possibilities frontier? -
✔✔As a constant
✔✔What is happening to opportunity cost along a bowed out production possibilities
frontier? - ✔✔Is it increasing
,✔✔What goods do countries trade? - ✔✔Those goods for which they have the lowest
opportunity cost to produce
✔✔What does a rise in the price of a good almost always cause? - ✔✔A decrease in
the quantity demanded
✔✔What does a fall in the price of a good almost always cause? - ✔✔An increase in the
quantity demanded
✔✔What is the inverse relationship between price and quantity known as? - ✔✔The law
of demand
✔✔What does the law of demand assume? - ✔✔That all variables that affect demand,
other than price, remain constant
✔✔What is a demand curve? - ✔✔a graphical representation depicting the relationship
between a good or service's price and the quantities consumers are willing to buy at
those prices.
✔✔What is a demand schedule? - ✔✔A table view of the price-quantity pairings that
compose the demand curve
✔✔What will result in movement along a demand curve (up or down)? - ✔✔A change in
price - a change in quantity demanded
✔✔What will result in a shift in a demand curve (left or right)? - ✔✔A change in a non-
price - a change in demand
✔✔What causes changes in demand (shifts in the demand curve)? - ✔✔- Changes in
consumer income, tastes, and preferences
- The size of the population
- prices of other goods such as complements and substitutes
- expectations about the future.
✔✔What fundamental similarity do nearly all demand curves share? - ✔✔They slope
down from left to right
✔✔What is the positive relationship between price and quantity known as? - ✔✔The law
of supply
✔✔What does the law of supply assume? - ✔✔That all variables affecting supply, other
than price, remain constant
, ✔✔What does a rise in the price of a good or service increase? - ✔✔The quantity
supplied of that good or service
✔✔What does a supply curve depict? - ✔✔The relationship between the price of a good
or service and the quantities companies are willing to sell at those prices
✔✔What is a supply schedule? - ✔✔A table view of the price-quantity pairing that
compose the supply curve.
✔✔What will suppliers do to adjust for non-price changes related to the determinants of
supply? - ✔✔Shift production
✔✔What will suppliers do to adjust for price-related changes on the supply curve? -
✔✔Move production levels
✔✔what are changes in supply (shifts in the supply curve) caused by? - ✔✔Prices of
inputs, technology,expectations, number of sellers, and government policies and
regulations
✔✔What fundamental similarity do nearly all supply curves share? - ✔✔They slope up
from left to right
✔✔When does the equilibrium price and equilibrium quantity occur? - ✔✔Where the
supply and demand curves cross.
✔✔When does equilibrium occur? - ✔✔When the quantity demanded is equal to the
quantity supplied
✔✔Why would the price be below the equilibrium level? - ✔✔The quantity demanded
will exceed the quantity supplied. -- Excess demand or a shortage will exist.
✔✔What is occurring if the price is above the equilibrium level? - ✔✔The quantity
supplied will exceed the quantity demanded. -- Excess supply or a surplus will exist
✔✔When does the equilibrium in the market change? - ✔✔When an event shifts either
the supply or demand curve
✔✔What does price elasticity measure? - ✔✔The responsiveness of the quantity
demanded or supplied of a good to a change in its price.
✔✔How is price elasticity of demand calculated? - ✔✔% change in quantity demand / %
change in price
EXAMINATION QUESTIONS AND ANSWERS SURE A+
✔✔When does the Production Possibilities Frontier (PPF) have a bowed-out shape
caused by increasing opportunity cost? - ✔✔When the factors of production are
heterogeneous
✔✔On the production possibilities frontier, what must be sacrificed to produce more of
one good? - ✔✔The production of the other good
✔✔What can shift the production possibilities frontier outward, making what was
previously unattainable attainable? - ✔✔Technological advances, an increase in
resource quality or quantity, and an increase in trade
✔✔What happens if the source of inefficiency is eliminated? - ✔✔Production can be
increased.
✔✔What happens when a circumstance such as excessive unemployment results in a
country producing less than it could from its available resources? - ✔✔An inefficient
outcome occurs
✔✔What is a situational decision in which you lose one quality, quantity, or property in
return for gaining something else called? - ✔✔Trade-off
✔✔What must be thoroughly evaluated to make a trade-off decision? - ✔✔The marginal
benefits and marginal costs of each option.
✔✔What forces you to make trade-offs? - ✔✔Scarcity
✔✔If the inputs of production are underutilized, is a decrease in production of the other
good required when increasing production to the point that the output combinations sit
on the production possibilities frontier? - ✔✔No
✔✔How is opportunity cost calculated? - ✔✔By dividing the amount of a good you have
given up by the amount of the good you have gained.
✔✔How does opportunity cost appear along a linear production possibilities frontier? -
✔✔As a constant
✔✔What is happening to opportunity cost along a bowed out production possibilities
frontier? - ✔✔Is it increasing
,✔✔What goods do countries trade? - ✔✔Those goods for which they have the lowest
opportunity cost to produce
✔✔What does a rise in the price of a good almost always cause? - ✔✔A decrease in
the quantity demanded
✔✔What does a fall in the price of a good almost always cause? - ✔✔An increase in the
quantity demanded
✔✔What is the inverse relationship between price and quantity known as? - ✔✔The law
of demand
✔✔What does the law of demand assume? - ✔✔That all variables that affect demand,
other than price, remain constant
✔✔What is a demand curve? - ✔✔a graphical representation depicting the relationship
between a good or service's price and the quantities consumers are willing to buy at
those prices.
✔✔What is a demand schedule? - ✔✔A table view of the price-quantity pairings that
compose the demand curve
✔✔What will result in movement along a demand curve (up or down)? - ✔✔A change in
price - a change in quantity demanded
✔✔What will result in a shift in a demand curve (left or right)? - ✔✔A change in a non-
price - a change in demand
✔✔What causes changes in demand (shifts in the demand curve)? - ✔✔- Changes in
consumer income, tastes, and preferences
- The size of the population
- prices of other goods such as complements and substitutes
- expectations about the future.
✔✔What fundamental similarity do nearly all demand curves share? - ✔✔They slope
down from left to right
✔✔What is the positive relationship between price and quantity known as? - ✔✔The law
of supply
✔✔What does the law of supply assume? - ✔✔That all variables affecting supply, other
than price, remain constant
, ✔✔What does a rise in the price of a good or service increase? - ✔✔The quantity
supplied of that good or service
✔✔What does a supply curve depict? - ✔✔The relationship between the price of a good
or service and the quantities companies are willing to sell at those prices
✔✔What is a supply schedule? - ✔✔A table view of the price-quantity pairing that
compose the supply curve.
✔✔What will suppliers do to adjust for non-price changes related to the determinants of
supply? - ✔✔Shift production
✔✔What will suppliers do to adjust for price-related changes on the supply curve? -
✔✔Move production levels
✔✔what are changes in supply (shifts in the supply curve) caused by? - ✔✔Prices of
inputs, technology,expectations, number of sellers, and government policies and
regulations
✔✔What fundamental similarity do nearly all supply curves share? - ✔✔They slope up
from left to right
✔✔When does the equilibrium price and equilibrium quantity occur? - ✔✔Where the
supply and demand curves cross.
✔✔When does equilibrium occur? - ✔✔When the quantity demanded is equal to the
quantity supplied
✔✔Why would the price be below the equilibrium level? - ✔✔The quantity demanded
will exceed the quantity supplied. -- Excess demand or a shortage will exist.
✔✔What is occurring if the price is above the equilibrium level? - ✔✔The quantity
supplied will exceed the quantity demanded. -- Excess supply or a surplus will exist
✔✔When does the equilibrium in the market change? - ✔✔When an event shifts either
the supply or demand curve
✔✔What does price elasticity measure? - ✔✔The responsiveness of the quantity
demanded or supplied of a good to a change in its price.
✔✔How is price elasticity of demand calculated? - ✔✔% change in quantity demand / %
change in price
