WGU - D089 Principles of Economics EXAM WITH CORRECT ANSWERS,

WGU - D089 Principles of Economics
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EXAM WITH CORRECT ANSWERS |\ |\ |\




Economics - CORRECT ANSWERS ✔✔The study of how humans
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make decisions in the face of scarcity.
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Factors of Production - CORRECT ANSWERS ✔✔Describes
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theninputs used in the production of goods or services to make
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an economic profit.
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Macroeconomics - CORRECT ANSWERS ✔✔A branch of economic |\ |\ |\ |\ |\ |\ |\ |\


dealing with the performance, structure, behavior and decision
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making of an economy as a whole.
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Microeconomics - CORRECT ANSWERS ✔✔A branch of economics |\ |\ |\ |\ |\ |\ |\ |\


that studies the behavior of individuals, and firms in making
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decisions regarding the allocation of scarce resources and the
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interactions among these individuals and firms. |\ |\ |\ |\ |\




Scarcity - CORRECT ANSWERS ✔✔The basic economic problem,
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the gap between limited, scarce, resources and theoretically
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limitless wants |\




Opportunity Cost - CORRECT ANSWERS ✔✔The next best |\ |\ |\ |\ |\ |\ |\ |\


alternative that is given up when a choice is made.
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,Think at the Margin - CORRECT ANSWERS ✔✔Thinking about
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what the next step or an additional action means for a person.
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Marginal Benefit - CORRECT ANSWERS ✔✔The incremental
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increase in the benefit to a consumer caused by the consumption
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of one additional unit of a good or service.
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1st (Principles of Economics ) - CORRECT ANSWERS ✔✔Everyone
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faces tradeoffs |\




2nd (Principles of Economics ) - CORRECT ANSWERS ✔✔The cost
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of something is determined by what you give up to get it.
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3rd (Principles of Economics ) - CORRECT ANSWERS ✔✔Rational
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people think at the margin. |\ |\ |\ |\




4th (Principles of Economics ) - CORRECT ANSWERS ✔✔People
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respond to incentives. |\ |\




5th (Principles of Economics ) - CORRECT ANSWERS ✔✔Trade can
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benefit everyone.
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6th (Principles of Economics ) - CORRECT ANSWERS ✔✔Markets
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are a sound method of organizing economic activity.
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7th (Principles of Economics ) - CORRECT ANSWERS
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✔✔Government may be able to improve market outcomes. |\ |\ |\ |\ |\ |\ |\

,8th (Principles of Economics ) - CORRECT ANSWERS ✔✔A nation's
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standard of living depends on its ability to produce.
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9th (Principles of Economics ) - CORRECT ANSWERS ✔✔Printing
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too much money causes prices to rise.
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10th (Principles of Economics ) - CORRECT ANSWERS ✔✔There is
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short-run tradeoff between inflation and unemployment.
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Economic Systems - CORRECT ANSWERS ✔✔A system of the
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production, resource allocation, and distribution of goods and
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services within a society or give geographic area.
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Traditional Economy - CORRECT ANSWERS ✔✔A economic system
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that relies on customs, history. and time-honored beliefs. Guides
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economic decisions such as production and distribution.
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Command Economy - CORRECT ANSWERS ✔✔An economic
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system in which production, investment, prices, and incomes are
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determined centrally by a government. |\ |\ |\ |\ |\




(Centralized)


Market Economy - CORRECT ANSWERS ✔✔An economic system in
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which the decisions regarding investment, production, and
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distribution are guided by the price signals created by the forces
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of supply and demand
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, (Decentralized)


Mixed Economy - CORRECT ANSWERS ✔✔An economic system in
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which both private enterprise and a degree of state monopoly
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(usually in public services, defense, infrastructure, and basic
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industries) coexist. |\




Positive Economics - CORRECT ANSWERS ✔✔The study of
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economics concerned with what is and what will happen if a
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course of action is taken or not taken.
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Normative Economics - CORRECT ANSWERS ✔✔The study of
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economics with what is and what will happen if a course of action
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is taken or not taken.
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Economic Models - CORRECT ANSWERS ✔✔A simplified version of
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reality that allows people to observe, understand and make
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predictions about economic behavior. |\ |\ |\




Economic Indicators - CORRECT ANSWERS ✔✔A statistic about an
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economic activity.
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Circular Flow Model - CORRECT ANSWERS ✔✔An economic model
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that shows the flow of money and goods through the economy.
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The most common form of this model shows the circular flow of
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income between the household sector and the business sector.
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