PRINCIPLES OF ECONOMICS D089 WGU |
STUDY GUIDE | QUESTIONS AND ANSWERS
| EXAM PREP | GRADED A+ |
GUARANTEED SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Q: Law of diminishing returns & PPF? As more resources go to one good, marginal benefit decreases the PPF bows out →
increasing opportunity cost.
Q: Law of demand? Price lowering → quantity demanded goes up; price raising → quantity demanded goes
down.
Q: Law of supply? Price rising → quantity supplied rises; price lowering → quantity supplied goes down.
Q: Demand vs. quantity demanded? Demand = entire curve
Quantity demanded = specific point.
Q: Supply vs. quantity supplied? Supply = entire curve
Quantity supplied = specific point.
Q: What are Determinants of demand? Income, prices of related goods, tastes, expectations, number of buyers.
Q: What are Determinants of supply? Input costs, technology, taxes/subsidies, expectations, number of sellers, regulations,
natural conditions.
Q: What is Market equilibrium? Quantity demanded = quantity supplied; no tendency for price to change.
Q: Surplus Price above equilibrium → Qs > Qd → price falls.
Q: Shortage Price below equilibrium → Qd > Qs → price rises.
Q: Four-step method for changes in equilibrium Identify original equilibrium → Identify which curve shifts → Determine direction → Find
new equilibrium.
Q: Price as coordinating mechanism? Signals shortages (price too low) and surpluses (price too high) to adjust market
behavior.
Q: Price elasticity of demand formula % change in quantity demanded ÷ % change in price.
Q: Define Elastic, inelastic, and unit elastic demand? Elastic = quantity changes a lot,
Inelastic = quantity changes little
Unit elastic = proportional change.
STUDY GUIDE | QUESTIONS AND ANSWERS
| EXAM PREP | GRADED A+ |
GUARANTEED SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Q: Law of diminishing returns & PPF? As more resources go to one good, marginal benefit decreases the PPF bows out →
increasing opportunity cost.
Q: Law of demand? Price lowering → quantity demanded goes up; price raising → quantity demanded goes
down.
Q: Law of supply? Price rising → quantity supplied rises; price lowering → quantity supplied goes down.
Q: Demand vs. quantity demanded? Demand = entire curve
Quantity demanded = specific point.
Q: Supply vs. quantity supplied? Supply = entire curve
Quantity supplied = specific point.
Q: What are Determinants of demand? Income, prices of related goods, tastes, expectations, number of buyers.
Q: What are Determinants of supply? Input costs, technology, taxes/subsidies, expectations, number of sellers, regulations,
natural conditions.
Q: What is Market equilibrium? Quantity demanded = quantity supplied; no tendency for price to change.
Q: Surplus Price above equilibrium → Qs > Qd → price falls.
Q: Shortage Price below equilibrium → Qd > Qs → price rises.
Q: Four-step method for changes in equilibrium Identify original equilibrium → Identify which curve shifts → Determine direction → Find
new equilibrium.
Q: Price as coordinating mechanism? Signals shortages (price too low) and surpluses (price too high) to adjust market
behavior.
Q: Price elasticity of demand formula % change in quantity demanded ÷ % change in price.
Q: Define Elastic, inelastic, and unit elastic demand? Elastic = quantity changes a lot,
Inelastic = quantity changes little
Unit elastic = proportional change.
