1|Page
WGU D089 OBJECTIVE ASSESSMENT 2 NEWEST 2026
ACTUAL EXAM| D089 PRINCIPLES OF ECONOMICS
OA FINAL WITH COMPLETE 300 REAL EXAM
QUESTIONS AND CORRECT VERIFIED ANSWERS/
ALREADY GRADED A+ (MOST RECENT!!)
What does price elasticity measure? - ANSWER - The responsiveness of
the quantity demanded or supplied of a good to a change in its price.
How is price elasticity of demand calculated? - ANSWER - % change in
quantity demand / % change in price
What are the three ways to describe elasticity? - ANSWER - - Elastic
(Quantity is very responsive)
- Unit Elastic (equal change in quantity)
- Inelastic (Quantity is not very responsive)
What is indicated by an elastic demand or supply curve? - ANSWER -
The quantity demanded or supplied responds to price changes in a
greater than proportional manner.
What is indicated by an inelastic demand or supply curve? - ANSWER -
A given percentage change in price will cause a smaller percentage
change in the quantity demanded or supplied.
pg. 1
,2|Page
What is indicated by a unitary elasticity demand or supply curve? -
ANSWER - A given percentage change in price leads to an equal
percentage change in the quantity demanded or supplied.
What happens if demand is inelastic? - ANSWER - An increase in price
causes an increase in total revenue.
What happens if demand is elastic? - ANSWER - An increase in price
causes a decrease in total revenue
Why would a price floor or a price ceiling be imposed? - ANSWER - It
will prevent a market from adjusting to its equilibrium price and quantity
and thus will create an inefficient outcome
What is the outcome of a price ceiling being set below the equilibrium
price? - ANSWER - Quantity demanded will exceed quantity supplied
and excess demand or shortages will result.
What is the outcome of a price floor being set above the equilibrium
price? - ANSWER - Quantity supplied will exceed quantity demanded
and excess supply or surpluses will result.
When might government-imposed price controls have a positive effect -
ANSWER - If they are used to correct an existing market failure
pg. 2
,3|Page
What happens when price controls are applied to well-functioning
markets? - ANSWER - The market outcome is inefficient
What happens to market outcomes when information about the quality
of products is imperfect? - ANSWER - Market outcomes will be
inefficient
What does a buyer rely on to judge the quality of products when
confronted with imperfect information? - ANSWER - Price
What is the result of buyer's relying on price to indicate the quality of
products when confronted with imperfect information? - ANSWER -
Markets may have difficulty reaching an equilibrium price and quantity
In high-quality or medium quality goods markets with imperfect
information where sellers find it difficult to demonstrate the quality of
their goods to buyers, what are buyer's unwilling to do? - ANSWER -
Pay a higher price for the goods
What can imperfect information lean to? - ANSWER - Riskier behavior
due to moral hazard
What are used to mitigate the risk of imperfect information? - ANSWER
- Guarantees, warranties, and service contracts
pg. 3
, 4|Page
When does an externality occur? - ANSWER - When an exchange
between a buyer and a seller has an impact on a third party who is not
part of the exchange
How do markets react when a positive externality is present? -
ANSWER - They under-produce, generating inefficient outcomes.
What can government intervention in markets with positive externalities
encourage? - ANSWER - Actions that create benefits for others by
providing incentives to increase production
How do markets react when a negative externality is present? -
ANSWER - They overproduce, generating inefficient outcomes.
What do government intervention in markets with negative externalities
discourage? - ANSWER - Actions that create costs for others by
imposing costs on production
What are explicit costs? - ANSWER - Out of pocket costs
What are implicit costs? - ANSWER - Opportunity costs
In the short run, there is at least one input that cannot be changed. What
is this input called? - ANSWER - A fixed input
pg. 4
WGU D089 OBJECTIVE ASSESSMENT 2 NEWEST 2026
ACTUAL EXAM| D089 PRINCIPLES OF ECONOMICS
OA FINAL WITH COMPLETE 300 REAL EXAM
QUESTIONS AND CORRECT VERIFIED ANSWERS/
ALREADY GRADED A+ (MOST RECENT!!)
What does price elasticity measure? - ANSWER - The responsiveness of
the quantity demanded or supplied of a good to a change in its price.
How is price elasticity of demand calculated? - ANSWER - % change in
quantity demand / % change in price
What are the three ways to describe elasticity? - ANSWER - - Elastic
(Quantity is very responsive)
- Unit Elastic (equal change in quantity)
- Inelastic (Quantity is not very responsive)
What is indicated by an elastic demand or supply curve? - ANSWER -
The quantity demanded or supplied responds to price changes in a
greater than proportional manner.
What is indicated by an inelastic demand or supply curve? - ANSWER -
A given percentage change in price will cause a smaller percentage
change in the quantity demanded or supplied.
pg. 1
,2|Page
What is indicated by a unitary elasticity demand or supply curve? -
ANSWER - A given percentage change in price leads to an equal
percentage change in the quantity demanded or supplied.
What happens if demand is inelastic? - ANSWER - An increase in price
causes an increase in total revenue.
What happens if demand is elastic? - ANSWER - An increase in price
causes a decrease in total revenue
Why would a price floor or a price ceiling be imposed? - ANSWER - It
will prevent a market from adjusting to its equilibrium price and quantity
and thus will create an inefficient outcome
What is the outcome of a price ceiling being set below the equilibrium
price? - ANSWER - Quantity demanded will exceed quantity supplied
and excess demand or shortages will result.
What is the outcome of a price floor being set above the equilibrium
price? - ANSWER - Quantity supplied will exceed quantity demanded
and excess supply or surpluses will result.
When might government-imposed price controls have a positive effect -
ANSWER - If they are used to correct an existing market failure
pg. 2
,3|Page
What happens when price controls are applied to well-functioning
markets? - ANSWER - The market outcome is inefficient
What happens to market outcomes when information about the quality
of products is imperfect? - ANSWER - Market outcomes will be
inefficient
What does a buyer rely on to judge the quality of products when
confronted with imperfect information? - ANSWER - Price
What is the result of buyer's relying on price to indicate the quality of
products when confronted with imperfect information? - ANSWER -
Markets may have difficulty reaching an equilibrium price and quantity
In high-quality or medium quality goods markets with imperfect
information where sellers find it difficult to demonstrate the quality of
their goods to buyers, what are buyer's unwilling to do? - ANSWER -
Pay a higher price for the goods
What can imperfect information lean to? - ANSWER - Riskier behavior
due to moral hazard
What are used to mitigate the risk of imperfect information? - ANSWER
- Guarantees, warranties, and service contracts
pg. 3
, 4|Page
When does an externality occur? - ANSWER - When an exchange
between a buyer and a seller has an impact on a third party who is not
part of the exchange
How do markets react when a positive externality is present? -
ANSWER - They under-produce, generating inefficient outcomes.
What can government intervention in markets with positive externalities
encourage? - ANSWER - Actions that create benefits for others by
providing incentives to increase production
How do markets react when a negative externality is present? -
ANSWER - They overproduce, generating inefficient outcomes.
What do government intervention in markets with negative externalities
discourage? - ANSWER - Actions that create costs for others by
imposing costs on production
What are explicit costs? - ANSWER - Out of pocket costs
What are implicit costs? - ANSWER - Opportunity costs
In the short run, there is at least one input that cannot be changed. What
is this input called? - ANSWER - A fixed input
pg. 4
