1|Page
WGU D089 ECONOMICS ACTUAL TESTBANK 2025/2026 WITH
COMPLETE QUESTIONS AND VERIFIED ANSWERS
A government imposes a price ceiling on rental apartments in a
major city to make housing more affordable. Over time, renters
struggle to find available apartments.
ANSWER
The price ceiling likely caused a shortage, where quantity
demanded exceeds quantity supplied, making it harder for renters
to find housing.
A country experiences rising inflation, so its central bank raises
interest rates significantly.
ANSWER
This is contractionary monetary policy; it is expected to reduce
consumer spending and business investment, helping to lower
inflation.
Impacts on Elasticity of Supply
- ANSWER:
- Number of producers
- Availability of resources
- Technology
- Flexibility
- Time
Total Revenue (TR) - ANSWER The income that a company
receives from its normal business activities, usually from goods
and services; defined as price times quantity
,2|Page
What happens when demand is inelastic (price elasticity less than
one) - ANSWER Price and total revenue move in the same
direction
Competitive advantage - ANSWER Something that places a
company or a person about the competition
Trade diversion - ANSWER When trade is diverted from a more
efficient exporter toward a less efficient one by the formation of a
free trade agreement or customs union
Economic inefficiency - ANSWER When all goods and factors of
production are not allocated to serve their highest and best use,
minimizing waste and inefficiency
Import tariffs - ANSWER Taxes on goods that are imported into a
country. They are more common than export tariffs
A coffee shop raises the price of its lattes by 20%. After the
change, it sees only a small drop in sales volume.
ANSWER
The demand for the lattes is inelastic, meaning consumers are not
very responsive to the price change.
Export tariffs - ANSWER Taxes on goods that are leaving a
country. Taxing exports may be done to raise tariff revenue or
restrict the world supply of a good
Protective tariffs - ANSWER Tariffs to protect a domestic industry
by making imported goods more expensive than equivalent
goods produced domestically
,3|Page
Why is productivity important for economic growth? - ANSWER
Higher productivity means more output is produced with the
same resources, leading to increased GDP and improved living
standards
Scarcity - ANSWER The basic economic problem; the gap between
limited, scarce, resources and theoretically limitless wants
Country A can produce 10 units of wheat or 5 units of steel with
the same resources. Country B can produce 4 units of wheat or 4
units of steel.
ANSWER
Country B has the comparative advantage in steel because it gives
up fewer units of wheat (1 unit of steel costs 1 unit of wheat)
compared to Country A (1 unit of steel costs 2 units of wheat).
Opportunity cost - ANSWER The next best alternative that is given
up when a choice is made
What are the eight major categories in the CPI?
- ANSWER
1. Food and beverages
2. Housing
3. Apparel
4. Transportation
5. Medical Care
6. Recreation
7. Education and communication
8. Other goods and services
, 4|Page
Think at the margin - ANSWER Thinking about what the next step
or an additional action means for a person
Marginal benefit - ANSWER The incremental increase in the
benefit to a consumer caused by the consumption of one
additional unit of a good or service
What must be thoroughly evaluated to make a trade-off decision?
- ANSWER The marginal benefits and marginal costs of each
option.
What forces you to make trade-offs? - ANSWER Scarcity
What happens when a circumstance such as excessive
unemployment results in a country producing less than it could
from its available resources? - ANSWER 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? -
ANSWER Trade-off
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? - ANSWER No
WGU D089 ECONOMICS ACTUAL TESTBANK 2025/2026 WITH
COMPLETE QUESTIONS AND VERIFIED ANSWERS
A government imposes a price ceiling on rental apartments in a
major city to make housing more affordable. Over time, renters
struggle to find available apartments.
ANSWER
The price ceiling likely caused a shortage, where quantity
demanded exceeds quantity supplied, making it harder for renters
to find housing.
A country experiences rising inflation, so its central bank raises
interest rates significantly.
ANSWER
This is contractionary monetary policy; it is expected to reduce
consumer spending and business investment, helping to lower
inflation.
Impacts on Elasticity of Supply
- ANSWER:
- Number of producers
- Availability of resources
- Technology
- Flexibility
- Time
Total Revenue (TR) - ANSWER The income that a company
receives from its normal business activities, usually from goods
and services; defined as price times quantity
,2|Page
What happens when demand is inelastic (price elasticity less than
one) - ANSWER Price and total revenue move in the same
direction
Competitive advantage - ANSWER Something that places a
company or a person about the competition
Trade diversion - ANSWER When trade is diverted from a more
efficient exporter toward a less efficient one by the formation of a
free trade agreement or customs union
Economic inefficiency - ANSWER When all goods and factors of
production are not allocated to serve their highest and best use,
minimizing waste and inefficiency
Import tariffs - ANSWER Taxes on goods that are imported into a
country. They are more common than export tariffs
A coffee shop raises the price of its lattes by 20%. After the
change, it sees only a small drop in sales volume.
ANSWER
The demand for the lattes is inelastic, meaning consumers are not
very responsive to the price change.
Export tariffs - ANSWER Taxes on goods that are leaving a
country. Taxing exports may be done to raise tariff revenue or
restrict the world supply of a good
Protective tariffs - ANSWER Tariffs to protect a domestic industry
by making imported goods more expensive than equivalent
goods produced domestically
,3|Page
Why is productivity important for economic growth? - ANSWER
Higher productivity means more output is produced with the
same resources, leading to increased GDP and improved living
standards
Scarcity - ANSWER The basic economic problem; the gap between
limited, scarce, resources and theoretically limitless wants
Country A can produce 10 units of wheat or 5 units of steel with
the same resources. Country B can produce 4 units of wheat or 4
units of steel.
ANSWER
Country B has the comparative advantage in steel because it gives
up fewer units of wheat (1 unit of steel costs 1 unit of wheat)
compared to Country A (1 unit of steel costs 2 units of wheat).
Opportunity cost - ANSWER The next best alternative that is given
up when a choice is made
What are the eight major categories in the CPI?
- ANSWER
1. Food and beverages
2. Housing
3. Apparel
4. Transportation
5. Medical Care
6. Recreation
7. Education and communication
8. Other goods and services
, 4|Page
Think at the margin - ANSWER Thinking about what the next step
or an additional action means for a person
Marginal benefit - ANSWER The incremental increase in the
benefit to a consumer caused by the consumption of one
additional unit of a good or service
What must be thoroughly evaluated to make a trade-off decision?
- ANSWER The marginal benefits and marginal costs of each
option.
What forces you to make trade-offs? - ANSWER Scarcity
What happens when a circumstance such as excessive
unemployment results in a country producing less than it could
from its available resources? - ANSWER 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? -
ANSWER Trade-off
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? - ANSWER No
