WGU D089 Principles of Economics
Objective Assessment Actual Exam
2026/2027 | Verified Questions
Western Governors University (WGU) | Verified Q&A |
Professional Business and Economics Students
This document contains 70 original questions developed to reinforce the official course objectives of WGU D089
Principles of Economics. The questions address The Economic Way of Thinking and Scarcity, Supply and Demand
and Market Equilibrium, Market Structures and Firm Behavior, and Macroeconomic Principles (GDP, Inflation,
Unemployment, and Fiscal/Monetary Policy). Content is designed to support professional competency and actual
exam readiness for Professional Business and Economics Students. All material is original and aligned with WGU
D089 course materials, foundational economics textbooks such as Mankiw, and current economic principles for the
2026/2027 cycle.
Domain: The Economic Way of Thinking and Scarcity
1. Scarcity in economics means that:
A. There are unlimited resources available to satisfy all wants
B. Human wants exceed the available resources, requiring choices
C. Only poor societies face resource constraints
D. Government can eliminate all trade-offs through planning
Correct Answer: C
Rationale: Scarcity is the fundamental economic problem: limited resources relative to unlimited wants force trade-offs.
2. Opportunity cost is best defined as:
A. The total monetary cost of a decision
B. The value of the next-best alternative forgone when a choice is made
C. The sum of all explicit costs only
D. A cost that can never be measured
Correct Answer: A
Rationale: Opportunity cost is the value of the highest-valued alternative that must be sacrificed.
3. The concept of marginal analysis involves:
A. Comparing total benefits and total costs only
B. Comparing the additional benefits and additional costs of a small change in activity
C. Ignoring incremental changes and focusing solely on averages
D. Making decisions based only on sunk costs
Correct Answer: C
Rationale: Rational decision-makers weigh marginal benefits against marginal costs.
4. A production possibilities frontier (PPF) illustrates:
A. Unlimited production with no constraints
B. The maximum combinations of two goods that can be produced with available resources and technology
C. Only the consumption possibilities of households
D. The demand curve for a single product
Correct Answer: D
Rationale: The PPF shows the trade-offs and opportunity costs of producing different combinations of goods.
5. Points inside the production possibilities frontier represent:
WGU D089 Principles of Economics Objective Assessment Actual Exam 2026/2027 | Verified Questions
, A. Efficient and full use of resources
B. Inefficient use of resources or unemployment of resources
C. Unattainable production levels
D. Only technological progress
Correct Answer: B
Rationale: Points inside the PPF indicate that resources are not being used fully or efficiently.
6. Economic models are simplified representations of reality that:
A. Must include every detail of the real world to be useful
B. Focus on essential relationships and abstract from less important details to generate testable predictions
C. Are never useful for policy analysis
D. Replace the need for empirical evidence
Correct Answer: D
Rationale: Models simplify reality to highlight key causal relationships and generate predictions.
7. The statement “There is no such thing as a free lunch” emphasizes that:
A. All goods are provided at zero monetary price
B. Every choice involves an opportunity cost
C. Government can provide goods without any cost
D. Scarcity can be eliminated by technology alone
Correct Answer: D
Rationale: Even goods that appear free require the sacrifice of alternative uses of resources.
8. Positive economics deals with:
A. Value judgments about what ought to be
B. Objective, testable statements about how the economy actually works
C. Only normative policy recommendations
D. Ethical evaluations of market outcomes
Correct Answer: C
Rationale: Positive economics describes and explains economic phenomena without prescribing what should be done.
9. Normative economics involves:
A. Purely descriptive statements that can be tested with data
B. Value-laden judgments about what economic outcomes are desirable
C. Only mathematical models without policy implications
D. Statements that are always true by definition
Correct Answer: D
Rationale: Normative statements express opinions about what should be and cannot be tested solely by data.
10. Comparative advantage exists when a producer:
A. Can produce more of a good than any other producer using the same resources
B. Has a lower opportunity cost of producing a good relative to another producer
C. Has an absolute advantage in every good
D. Faces no trade-offs in production
Correct Answer: C
Rationale: Comparative advantage is based on lower opportunity cost and is the basis for mutually beneficial trade.
11. Absolute advantage refers to:
A. The ability to produce a good at a lower opportunity cost
B. The ability to produce more of a good with the same resources than another producer
C. The absence of any scarcity
D. A situation in which trade is never beneficial
Correct Answer: D
Rationale: Absolute advantage is about higher productivity in physical terms, not necessarily lower opportunity cost.
12. Incentives in economics are:
A. Irrelevant to decision-making
B. Rewards or penalties that influence the choices of individuals and firms
C. Only monetary payments from government
D. Factors that eliminate scarcity
WGU D089 Principles of Economics Objective Assessment Actual Exam 2026/2027 | Verified Questions
Objective Assessment Actual Exam
2026/2027 | Verified Questions
Western Governors University (WGU) | Verified Q&A |
Professional Business and Economics Students
This document contains 70 original questions developed to reinforce the official course objectives of WGU D089
Principles of Economics. The questions address The Economic Way of Thinking and Scarcity, Supply and Demand
and Market Equilibrium, Market Structures and Firm Behavior, and Macroeconomic Principles (GDP, Inflation,
Unemployment, and Fiscal/Monetary Policy). Content is designed to support professional competency and actual
exam readiness for Professional Business and Economics Students. All material is original and aligned with WGU
D089 course materials, foundational economics textbooks such as Mankiw, and current economic principles for the
2026/2027 cycle.
Domain: The Economic Way of Thinking and Scarcity
1. Scarcity in economics means that:
A. There are unlimited resources available to satisfy all wants
B. Human wants exceed the available resources, requiring choices
C. Only poor societies face resource constraints
D. Government can eliminate all trade-offs through planning
Correct Answer: C
Rationale: Scarcity is the fundamental economic problem: limited resources relative to unlimited wants force trade-offs.
2. Opportunity cost is best defined as:
A. The total monetary cost of a decision
B. The value of the next-best alternative forgone when a choice is made
C. The sum of all explicit costs only
D. A cost that can never be measured
Correct Answer: A
Rationale: Opportunity cost is the value of the highest-valued alternative that must be sacrificed.
3. The concept of marginal analysis involves:
A. Comparing total benefits and total costs only
B. Comparing the additional benefits and additional costs of a small change in activity
C. Ignoring incremental changes and focusing solely on averages
D. Making decisions based only on sunk costs
Correct Answer: C
Rationale: Rational decision-makers weigh marginal benefits against marginal costs.
4. A production possibilities frontier (PPF) illustrates:
A. Unlimited production with no constraints
B. The maximum combinations of two goods that can be produced with available resources and technology
C. Only the consumption possibilities of households
D. The demand curve for a single product
Correct Answer: D
Rationale: The PPF shows the trade-offs and opportunity costs of producing different combinations of goods.
5. Points inside the production possibilities frontier represent:
WGU D089 Principles of Economics Objective Assessment Actual Exam 2026/2027 | Verified Questions
, A. Efficient and full use of resources
B. Inefficient use of resources or unemployment of resources
C. Unattainable production levels
D. Only technological progress
Correct Answer: B
Rationale: Points inside the PPF indicate that resources are not being used fully or efficiently.
6. Economic models are simplified representations of reality that:
A. Must include every detail of the real world to be useful
B. Focus on essential relationships and abstract from less important details to generate testable predictions
C. Are never useful for policy analysis
D. Replace the need for empirical evidence
Correct Answer: D
Rationale: Models simplify reality to highlight key causal relationships and generate predictions.
7. The statement “There is no such thing as a free lunch” emphasizes that:
A. All goods are provided at zero monetary price
B. Every choice involves an opportunity cost
C. Government can provide goods without any cost
D. Scarcity can be eliminated by technology alone
Correct Answer: D
Rationale: Even goods that appear free require the sacrifice of alternative uses of resources.
8. Positive economics deals with:
A. Value judgments about what ought to be
B. Objective, testable statements about how the economy actually works
C. Only normative policy recommendations
D. Ethical evaluations of market outcomes
Correct Answer: C
Rationale: Positive economics describes and explains economic phenomena without prescribing what should be done.
9. Normative economics involves:
A. Purely descriptive statements that can be tested with data
B. Value-laden judgments about what economic outcomes are desirable
C. Only mathematical models without policy implications
D. Statements that are always true by definition
Correct Answer: D
Rationale: Normative statements express opinions about what should be and cannot be tested solely by data.
10. Comparative advantage exists when a producer:
A. Can produce more of a good than any other producer using the same resources
B. Has a lower opportunity cost of producing a good relative to another producer
C. Has an absolute advantage in every good
D. Faces no trade-offs in production
Correct Answer: C
Rationale: Comparative advantage is based on lower opportunity cost and is the basis for mutually beneficial trade.
11. Absolute advantage refers to:
A. The ability to produce a good at a lower opportunity cost
B. The ability to produce more of a good with the same resources than another producer
C. The absence of any scarcity
D. A situation in which trade is never beneficial
Correct Answer: D
Rationale: Absolute advantage is about higher productivity in physical terms, not necessarily lower opportunity cost.
12. Incentives in economics are:
A. Irrelevant to decision-making
B. Rewards or penalties that influence the choices of individuals and firms
C. Only monetary payments from government
D. Factors that eliminate scarcity
WGU D089 Principles of Economics Objective Assessment Actual Exam 2026/2027 | Verified Questions
