Macro WGU Pre-assessment
According to the production possibilities curve model, as you increase the production
of one good, what will happen to the sacrifices of the alternate good? - ANSWER
They will steadily increase.
A farmer fully utilizes his resources to produce cauliflower and kale. As the farmer
produces more cauliflower, he has fewer resources available to produce kale. Which
curve is illustrated in this scenario? - ANSWER Production possibilities curve
What are the main foci of economics? - ANSWER Consumption, production, and the
use of scarce resources
Opportunity Cost equation - ANSWER what you sacrificed ÷ what you gained
Florence could earn an annual salary of $70,000 as a financial advisor or $60,000 as
a bank manager. Currently, Florence is a teacher and earns an annual salary of
$35,000.
What is Florence's opportunity cost for choosing to be a teacher instead of a financial
advisor? - ANSWER $35,000
What is Comparative Advantage? - ANSWER Countries benefit by producing what
they are most efficient in producing
Florence is a teacher and earns $35,000 a year. Her spouse is a part-time IT
specialist who earns $45,000 a year. Florence and her spouse decide that one of
them should quit work and become a stay-at-home parent.
Based on the principle of comparative advantage, who should be the full-time, stay-
at-home parent? - ANSWER Florence should stay home, since she has a lower
opportunity cost.
In the car manufacturing industry, the supply for cars has a positive slope. What
happens if the price of cars increases? - ANSWER There will be a movement along
the supply curve
Textbooks and class enrollments are complements. What happens to the demand
curve for textbooks if the tuition rate increases? - ANSWER It will shift to the left
Referring to the three economic questions of what, how, and for whom: in a market
system what determines these answers? - ANSWER The buyers and sellers
The unemployment rate increases 15% due to a recession. As a result, people will
have less income and will be spending less. This will ______ the demand for cars,
and the demand curve will shift to the ______ - ANSWER decrease the demand,
shift to the left
, In the car making industry, the supply for cars has a positive slope. Which two
factors can cause the supple curve to shift? - ANSWER A change in the cost of labor
A change in expectations about the future
The max number of skilled and unskilled workers are employed in an economy.
What type of employment is this? - ANSWER Full employment
Harry was laid off his job and began seeking employment. After awhile he stopped
looking and now months later he is still collecting unemployment. How would you
classify his employment status? - ANSWER Discouraged worker
What is Gross Domestic Product or GDP? - ANSWER the market value of all final
goods and services produced within a country in a given period.
The following equation is used to calculate the GDP: - ANSWER GDP = C + I + G +
(X - M) or GDP = private consumption + gross investment + government investment
+ government purchases + the exports - the imports.
A drought destroyed the rice crops, which caused the supply of rice to decrease.
What will occur as a result of the decrease in supply? - ANSWER The supply curve
for rice will shift leftward. This will cause an increase in the equilibrium price and a
decrease in the equilibrium quantity.
A country has a population of 50,000,000 people and a labor force of 20,000,000
people. The unemployment rate is 9.5%.
How many people are unemployed in this country? - ANSWER 1,900,000
An economist gave a lecture on economic fluctuations. When a student said that
inflation hurts everyone, the economist said that this is not necessarily true.
Who would most likely benefit from inflation? - ANSWER Borrowers of a loan with
variable interest
A business owner is creating a sales forecast for the next year. She chose to monitor
the consumer price index for indications of inflation; however, she is worried that
there may be drawbacks to this index.
What is a limitation faced by the owner in using the consumer price index? -
ANSWER She frequently adds new products and services to her business to appeal
to her constantly changing customer base.
The Federal Reserve recently announced that it will promote an expansionary policy.
It is expected that output will increase.
Which event will also occur as a result? - ANSWER Prices will rise rapidly, and
unemployment will fall.
Assume the following:
According to the production possibilities curve model, as you increase the production
of one good, what will happen to the sacrifices of the alternate good? - ANSWER
They will steadily increase.
A farmer fully utilizes his resources to produce cauliflower and kale. As the farmer
produces more cauliflower, he has fewer resources available to produce kale. Which
curve is illustrated in this scenario? - ANSWER Production possibilities curve
What are the main foci of economics? - ANSWER Consumption, production, and the
use of scarce resources
Opportunity Cost equation - ANSWER what you sacrificed ÷ what you gained
Florence could earn an annual salary of $70,000 as a financial advisor or $60,000 as
a bank manager. Currently, Florence is a teacher and earns an annual salary of
$35,000.
What is Florence's opportunity cost for choosing to be a teacher instead of a financial
advisor? - ANSWER $35,000
What is Comparative Advantage? - ANSWER Countries benefit by producing what
they are most efficient in producing
Florence is a teacher and earns $35,000 a year. Her spouse is a part-time IT
specialist who earns $45,000 a year. Florence and her spouse decide that one of
them should quit work and become a stay-at-home parent.
Based on the principle of comparative advantage, who should be the full-time, stay-
at-home parent? - ANSWER Florence should stay home, since she has a lower
opportunity cost.
In the car manufacturing industry, the supply for cars has a positive slope. What
happens if the price of cars increases? - ANSWER There will be a movement along
the supply curve
Textbooks and class enrollments are complements. What happens to the demand
curve for textbooks if the tuition rate increases? - ANSWER It will shift to the left
Referring to the three economic questions of what, how, and for whom: in a market
system what determines these answers? - ANSWER The buyers and sellers
The unemployment rate increases 15% due to a recession. As a result, people will
have less income and will be spending less. This will ______ the demand for cars,
and the demand curve will shift to the ______ - ANSWER decrease the demand,
shift to the left
, In the car making industry, the supply for cars has a positive slope. Which two
factors can cause the supple curve to shift? - ANSWER A change in the cost of labor
A change in expectations about the future
The max number of skilled and unskilled workers are employed in an economy.
What type of employment is this? - ANSWER Full employment
Harry was laid off his job and began seeking employment. After awhile he stopped
looking and now months later he is still collecting unemployment. How would you
classify his employment status? - ANSWER Discouraged worker
What is Gross Domestic Product or GDP? - ANSWER the market value of all final
goods and services produced within a country in a given period.
The following equation is used to calculate the GDP: - ANSWER GDP = C + I + G +
(X - M) or GDP = private consumption + gross investment + government investment
+ government purchases + the exports - the imports.
A drought destroyed the rice crops, which caused the supply of rice to decrease.
What will occur as a result of the decrease in supply? - ANSWER The supply curve
for rice will shift leftward. This will cause an increase in the equilibrium price and a
decrease in the equilibrium quantity.
A country has a population of 50,000,000 people and a labor force of 20,000,000
people. The unemployment rate is 9.5%.
How many people are unemployed in this country? - ANSWER 1,900,000
An economist gave a lecture on economic fluctuations. When a student said that
inflation hurts everyone, the economist said that this is not necessarily true.
Who would most likely benefit from inflation? - ANSWER Borrowers of a loan with
variable interest
A business owner is creating a sales forecast for the next year. She chose to monitor
the consumer price index for indications of inflation; however, she is worried that
there may be drawbacks to this index.
What is a limitation faced by the owner in using the consumer price index? -
ANSWER She frequently adds new products and services to her business to appeal
to her constantly changing customer base.
The Federal Reserve recently announced that it will promote an expansionary policy.
It is expected that output will increase.
Which event will also occur as a result? - ANSWER Prices will rise rapidly, and
unemployment will fall.
Assume the following:
