, lOMoARcPSD|43502630
lOMoARcPSD|43502630
WGU D089 Principles of Economics - Pre-assessment
Principles of Economics (Western Governors University)
1. A local government is making public policy decisions about spending funds. The residents have
differing opinions on whether the funds should be used for road repair, school expansion, health
care increases, or construction of a senior center. The local government must decide the priority.
Which economic question is this decision an example of?
A: What to produce.
2. A newspaper is trying to help citizens understand economic principles. Which misconception
should the article address?
A: Increasing the money supply raises the standard of living for consumers in the long run.
3. Which statement accurately reflects the relationship between short-run inflation
and unemployment? A: Less money in the economy reduces consumer spending.
4. Which scenario covers a topic included in
microeconomics? A: As a result of a hard freeze,
the price of cherries increases.
5. What accurately characterizes capital?
A: It can be in the form of intellectual discoveries.
6. Why is the circular flow model used?
A: To describe the interaction of businesses and households in markets.
7. What is a result of increasing opportunity costs?
A: To produce more of one good, the economy gives up more and more of other goods.
8. How would a production possibility frontier be drawn for an economy that produces two
goods with homogeneous resources?
A: As a constant slope, downward from left to right.
9. A company is operating at a point inside its production possibility frontier. Which conclusion is
lOMoARcPSD|43502630
WGU D089 Principles of Economics - Pre-assessment
Principles of Economics (Western Governors University)
1. A local government is making public policy decisions about spending funds. The residents have
differing opinions on whether the funds should be used for road repair, school expansion, health
care increases, or construction of a senior center. The local government must decide the priority.
Which economic question is this decision an example of?
A: What to produce.
2. A newspaper is trying to help citizens understand economic principles. Which misconception
should the article address?
A: Increasing the money supply raises the standard of living for consumers in the long run.
3. Which statement accurately reflects the relationship between short-run inflation
and unemployment? A: Less money in the economy reduces consumer spending.
4. Which scenario covers a topic included in
microeconomics? A: As a result of a hard freeze,
the price of cherries increases.
5. What accurately characterizes capital?
A: It can be in the form of intellectual discoveries.
6. Why is the circular flow model used?
A: To describe the interaction of businesses and households in markets.
7. What is a result of increasing opportunity costs?
A: To produce more of one good, the economy gives up more and more of other goods.
8. How would a production possibility frontier be drawn for an economy that produces two
goods with homogeneous resources?
A: As a constant slope, downward from left to right.
9. A company is operating at a point inside its production possibility frontier. Which conclusion is
