WGU D089 PRINCIPLES OF ECONOMICS
EXAMINATION TEST 2026 COMPLETE
QUESTIONS AND SOLUTIONS
⩥ Factors of Production. Answer: Describes theninputs used in the
production of goods or services to make an economic profit.
⩥ Macroeconomics. Answer: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
⩥ Microeconomics. 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. Answer: The basic economic problem, the gap between
limited, scarce, resources and theoretically limitless wants
⩥ Opportunity Cost. Answer: The next best alternative that is given up
when a choice is made.
⩥ 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.
⩥ 1st (Principles of Economics ). Answer: Everyone faces tradeoffs
⩥ 2nd (Principles of Economics ). Answer: The cost of something is
determined by what you give up to get it.
⩥ 3rd (Principles of Economics ). Answer: Rational people think at the
margin.
⩥ 4th (Principles of Economics ). Answer: People respond to incentives.
⩥ 5th (Principles of Economics ). Answer: Trade can benefit everyone.
⩥ 6th (Principles of Economics ). Answer: Markets are a sound method
of organizing economic activity.
⩥ 7th (Principles of Economics ). Answer: Government may be able to
improve market outcomes.
,⩥ 8th (Principles of Economics ). Answer: A nation's standard of living
depends on its ability to produce.
⩥ 9th (Principles of Economics ). Answer: Printing too much money
causes prices to rise.
⩥ 10th (Principles of Economics ). Answer: There is short-run tradeoff
between inflation and unemployment.
⩥ Economic Systems. Answer: A system of the production, resource
allocation, and distribution of goods and services within a society or
give geographic area.
⩥ Traditional Economy. Answer: A economic system that relies on
customs, history. and time-honored beliefs. Guides economic decisions
such as production and distribution.
⩥ Command Economy. Answer: An economic system in which
production, investment, prices, and incomes are determined centrally by
a government.
(Centralized)
, ⩥ Market Economy. Answer: An economic system in which the
decisions regarding investment, production, and distribution are guided
by the price signals created by the forces of supply and demand
(Decentralized)
⩥ Mixed Economy. Answer: An economic system in which both private
enterprise and a degree of state monopoly (usually in public services,
defense, infrastructure, and basic industries) coexist.
⩥ Positive Economics. Answer: The study of economics concerned with
what is and what will happen if a course of action is taken or not taken.
⩥ Normative Economics. Answer: The study of economics with what is
and what will happen if a course of action is taken or not taken.
⩥ Economic Models. Answer: A simplified version of reality that allows
people to observe, understand and make predictions about economic
behavior.
⩥ Economic Indicators. Answer: A statistic about an economic activity.
⩥ Circular Flow Model. Answer: An economic model that shows the
flow of money and goods through the economy. The most common form
EXAMINATION TEST 2026 COMPLETE
QUESTIONS AND SOLUTIONS
⩥ Factors of Production. Answer: Describes theninputs used in the
production of goods or services to make an economic profit.
⩥ Macroeconomics. Answer: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
⩥ Microeconomics. 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. Answer: The basic economic problem, the gap between
limited, scarce, resources and theoretically limitless wants
⩥ Opportunity Cost. Answer: The next best alternative that is given up
when a choice is made.
⩥ 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.
⩥ 1st (Principles of Economics ). Answer: Everyone faces tradeoffs
⩥ 2nd (Principles of Economics ). Answer: The cost of something is
determined by what you give up to get it.
⩥ 3rd (Principles of Economics ). Answer: Rational people think at the
margin.
⩥ 4th (Principles of Economics ). Answer: People respond to incentives.
⩥ 5th (Principles of Economics ). Answer: Trade can benefit everyone.
⩥ 6th (Principles of Economics ). Answer: Markets are a sound method
of organizing economic activity.
⩥ 7th (Principles of Economics ). Answer: Government may be able to
improve market outcomes.
,⩥ 8th (Principles of Economics ). Answer: A nation's standard of living
depends on its ability to produce.
⩥ 9th (Principles of Economics ). Answer: Printing too much money
causes prices to rise.
⩥ 10th (Principles of Economics ). Answer: There is short-run tradeoff
between inflation and unemployment.
⩥ Economic Systems. Answer: A system of the production, resource
allocation, and distribution of goods and services within a society or
give geographic area.
⩥ Traditional Economy. Answer: A economic system that relies on
customs, history. and time-honored beliefs. Guides economic decisions
such as production and distribution.
⩥ Command Economy. Answer: An economic system in which
production, investment, prices, and incomes are determined centrally by
a government.
(Centralized)
, ⩥ Market Economy. Answer: An economic system in which the
decisions regarding investment, production, and distribution are guided
by the price signals created by the forces of supply and demand
(Decentralized)
⩥ Mixed Economy. Answer: An economic system in which both private
enterprise and a degree of state monopoly (usually in public services,
defense, infrastructure, and basic industries) coexist.
⩥ Positive Economics. Answer: The study of economics concerned with
what is and what will happen if a course of action is taken or not taken.
⩥ Normative Economics. Answer: The study of economics with what is
and what will happen if a course of action is taken or not taken.
⩥ Economic Models. Answer: A simplified version of reality that allows
people to observe, understand and make predictions about economic
behavior.
⩥ Economic Indicators. Answer: A statistic about an economic activity.
⩥ Circular Flow Model. Answer: An economic model that shows the
flow of money and goods through the economy. The most common form
