WGU D089 LATEST EXAM PRINCIPLES OF ECONOMICS EXAM
QUESTIONS AND CORRECT ANSWERS | LATEST VERSION | ALREADY
GRADED A+ | JUST RELEASED
Macroeconomics - CORRECT ANSWER-A branch of economics dealing with the
performance, structure, behavior, and decision-making of an economy as a
whole
Microeconomics - CORRECT ANSWER-A branch of economics that studies the
behavior of individuals and firms in making decisions regarding the allocation
of scarce resources and the interactions among these individuals and firms
Scarcity - CORRECT ANSWER-The basic economic problem; the gap between
limited, scarce , resources and theoretically limitless wants
Opportunity cost - CORRECT ANSWER-The next best alternative that is given up
when a choice is made
Think at the margin - CORRECT ANSWER-Thinking about what the next step or
an additional action means for a person
Marginal benefit - CORRECT ANSWER-The incremental increase in the benefit
to a consumer caused by the consumption of one additional unit of a good or
service
Principles of Economics #1 - CORRECT ANSWER-Everyone faces trade-offs
Principles of Economics #2 - CORRECT ANSWER-The cost of something is
determined by what you give up to get it
,Principles of Economics #3 - CORRECT ANSWER-Rational people think at the
margin
Principles of Economics #4 - CORRECT ANSWER-People respond to incentives
Principles of Economics #5 - CORRECT ANSWER-Trade can benefit everyone
Principles of Economics #6 - CORRECT ANSWER-Markets are a sound method of
organizing economic activity
Principles of Economics #7 - CORRECT ANSWER-Governments may be able to
improve market outcomes
Principles of Economics #8 - CORRECT ANSWER-A nation's standard of living
depends on it's ability to produce.
Principles of Economics #9 - CORRECT ANSWER-Printing too much money
causes prices to rise
Principles of Economics #10 - CORRECT ANSWER-There is a short-run trade-off
between inflation and unemployment
Economic systems - CORRECT ANSWER-A system of the production, resource
allocation, and distribution of goods and services within a society or a given
geographic area
,Traditional Economy - CORRECT ANSWER-An economic system that relies on
customs, history, and time-honored beliefs. Tradition guides economic
decisions such as production and distribution
Command Economy - CORRECT ANSWER-An economic system in which
production, investment, prices, and incomes are determined centrally by a
government
Market Economy - CORRECT ANSWER-An economic system in which the
decisions regarding investments, production, and distribution are guided by the
price signals created by the forces of supply and demand
Mixed Economy - CORRECT ANSWER-An economic system in which both
private enterprise and a degree of state monopoly (Usually in public services,
defense, infrastructure, and basic industries) co-exist
Five key characteristics of a Traditional Economy - CORRECT ANSWER-1. It is
centered around families or tribes.
2. It exists in a hunter-gatherer and nomadic society.
3. Trade is heavily dependent on bartering rather than money.
4. It only produces what is needed, and a surplus is very rare.
5. It eventually changes from purely trade to the use of some type of currency.
Advantages to a Traditional Economy - CORRECT ANSWER-There is little
competition or friction among members of the society.
People's roles and contributions are well understood.
It can be more sustainable than a technology-based economy.
Disadvantages to a Traditional Economy - CORRECT ANSWER-It is exposed to
environmental changes and weather patterns.
, It is vulnerable to market of command economies, which consume and deplete
the resources or traditional economies.
Five key characteristics of a Command Economy - CORRECT ANSWER-1. All
economic activity is planned and controlled by a centralized government
power.
2. The government decides how to use and distribute the nation's natural,
capital, and labor resources.
3. A nation's central power controls the priorities for how goods and services
will be produced and distributed.
4. Domestic competition is overpowered as the government monopolizes
businesses considered essential for economic goals such as utilities, finance,
and automotive companies.
5. Businesses are required to follow specific hiring and production targets set
by the government. This creates regulations and directives to enforce the
centralized plan.
Advantages of a Command Economy - CORRECT ANSWER-In this type of
system, goods, services, and resources are deployed without concern for
environmental or other regulatory issues.
The government can transform the entire society to fit the constraints of its
national vision through nationalizing industry and deciding where workers will
be placed.
Disadvantages of a Command Economy - CORRECT ANSWER-Underlying black
market economies tend to develop as a response to difficult access to goods
and services.
Rationing commonly occurs due to poor planning and an inability to meet
societal demands.
People are discouraged from innovating and are required to follow orders and
keep with the central plan.
QUESTIONS AND CORRECT ANSWERS | LATEST VERSION | ALREADY
GRADED A+ | JUST RELEASED
Macroeconomics - CORRECT ANSWER-A branch of economics dealing with the
performance, structure, behavior, and decision-making of an economy as a
whole
Microeconomics - CORRECT ANSWER-A branch of economics that studies the
behavior of individuals and firms in making decisions regarding the allocation
of scarce resources and the interactions among these individuals and firms
Scarcity - CORRECT ANSWER-The basic economic problem; the gap between
limited, scarce , resources and theoretically limitless wants
Opportunity cost - CORRECT ANSWER-The next best alternative that is given up
when a choice is made
Think at the margin - CORRECT ANSWER-Thinking about what the next step or
an additional action means for a person
Marginal benefit - CORRECT ANSWER-The incremental increase in the benefit
to a consumer caused by the consumption of one additional unit of a good or
service
Principles of Economics #1 - CORRECT ANSWER-Everyone faces trade-offs
Principles of Economics #2 - CORRECT ANSWER-The cost of something is
determined by what you give up to get it
,Principles of Economics #3 - CORRECT ANSWER-Rational people think at the
margin
Principles of Economics #4 - CORRECT ANSWER-People respond to incentives
Principles of Economics #5 - CORRECT ANSWER-Trade can benefit everyone
Principles of Economics #6 - CORRECT ANSWER-Markets are a sound method of
organizing economic activity
Principles of Economics #7 - CORRECT ANSWER-Governments may be able to
improve market outcomes
Principles of Economics #8 - CORRECT ANSWER-A nation's standard of living
depends on it's ability to produce.
Principles of Economics #9 - CORRECT ANSWER-Printing too much money
causes prices to rise
Principles of Economics #10 - CORRECT ANSWER-There is a short-run trade-off
between inflation and unemployment
Economic systems - CORRECT ANSWER-A system of the production, resource
allocation, and distribution of goods and services within a society or a given
geographic area
,Traditional Economy - CORRECT ANSWER-An economic system that relies on
customs, history, and time-honored beliefs. Tradition guides economic
decisions such as production and distribution
Command Economy - CORRECT ANSWER-An economic system in which
production, investment, prices, and incomes are determined centrally by a
government
Market Economy - CORRECT ANSWER-An economic system in which the
decisions regarding investments, production, and distribution are guided by the
price signals created by the forces of supply and demand
Mixed Economy - CORRECT ANSWER-An economic system in which both
private enterprise and a degree of state monopoly (Usually in public services,
defense, infrastructure, and basic industries) co-exist
Five key characteristics of a Traditional Economy - CORRECT ANSWER-1. It is
centered around families or tribes.
2. It exists in a hunter-gatherer and nomadic society.
3. Trade is heavily dependent on bartering rather than money.
4. It only produces what is needed, and a surplus is very rare.
5. It eventually changes from purely trade to the use of some type of currency.
Advantages to a Traditional Economy - CORRECT ANSWER-There is little
competition or friction among members of the society.
People's roles and contributions are well understood.
It can be more sustainable than a technology-based economy.
Disadvantages to a Traditional Economy - CORRECT ANSWER-It is exposed to
environmental changes and weather patterns.
, It is vulnerable to market of command economies, which consume and deplete
the resources or traditional economies.
Five key characteristics of a Command Economy - CORRECT ANSWER-1. All
economic activity is planned and controlled by a centralized government
power.
2. The government decides how to use and distribute the nation's natural,
capital, and labor resources.
3. A nation's central power controls the priorities for how goods and services
will be produced and distributed.
4. Domestic competition is overpowered as the government monopolizes
businesses considered essential for economic goals such as utilities, finance,
and automotive companies.
5. Businesses are required to follow specific hiring and production targets set
by the government. This creates regulations and directives to enforce the
centralized plan.
Advantages of a Command Economy - CORRECT ANSWER-In this type of
system, goods, services, and resources are deployed without concern for
environmental or other regulatory issues.
The government can transform the entire society to fit the constraints of its
national vision through nationalizing industry and deciding where workers will
be placed.
Disadvantages of a Command Economy - CORRECT ANSWER-Underlying black
market economies tend to develop as a response to difficult access to goods
and services.
Rationing commonly occurs due to poor planning and an inability to meet
societal demands.
People are discouraged from innovating and are required to follow orders and
keep with the central plan.
