WGU D089 PRINCIPLES OF ECONOMICS
EXAM 2025 QUESTIONS AND ANSWERS
Economics - ANS The study of how humans make decisions in the face of scarcity.
Factors of Production - ANS Describes theninputs used in the production of goods or services
to make an economic profit.
Macroeconomics - ANS A branch of economic dealing with the performance, structure,
behavior and decision making of an economy as a whole.
Microeconomics - ANS 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 - ANS The basic economic problem, the gap between limited, scarce, resources and
theoretically limitless wants
Opportunity Cost - ANS The next best alternative that is given up when a choice is made.
Think at the Margin - ANS Thinking about what the next step or an additional action means
for a person.
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, Marginal Benefit - ANS 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 ) - ANS Everyone faces tradeoffs
2nd (Principles of Economics ) - ANS The cost of something is determined by what you give
up to get it.
3rd (Principles of Economics ) - ANS Rational people think at the margin.
4th (Principles of Economics ) - ANS People respond to incentives.
5th (Principles of Economics ) - ANS Trade can benefit everyone.
6th (Principles of Economics ) - ANS Markets are a sound method of organizing economic
activity.
7th (Principles of Economics ) - ANS Government may be able to improve market outcomes.
8th (Principles of Economics ) - ANS A nation's standard of living depends on its ability to
produce.
9th (Principles of Economics ) - ANS Printing too much money causes prices to rise.
10th (Principles of Economics ) - ANS There is short-run tradeoff between inflation and
unemployment.
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, Economic Systems - ANS A system of the production, resource allocation, and distribution of
goods and services within a society or give geographic area.
Traditional Economy - ANS A economic system that relies on customs, history. and time-
honored beliefs. Guides economic decisions such as production and distribution.
Command Economy - ANS An economic system in which production, investment, prices, and
incomes are determined centrally by a government.
(Centralized)
Market Economy - ANS 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 - ANS 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 - ANS The study of economics concerned with what is and what will
happen if a course of action is taken or not taken.
Normative Economics - ANS The study of economics with what is and what will happen if a
course of action is taken or not taken.
Economic Models - ANS A simplified version of reality that allows people to observe,
understand and make predictions about economic behavior.
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Economic Indicators - ANS A statistic about an economic activity.
@COPYRIGHT @THEBRIGHT 2025/2026
EXAM 2025 QUESTIONS AND ANSWERS
Economics - ANS The study of how humans make decisions in the face of scarcity.
Factors of Production - ANS Describes theninputs used in the production of goods or services
to make an economic profit.
Macroeconomics - ANS A branch of economic dealing with the performance, structure,
behavior and decision making of an economy as a whole.
Microeconomics - ANS 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 - ANS The basic economic problem, the gap between limited, scarce, resources and
theoretically limitless wants
Opportunity Cost - ANS The next best alternative that is given up when a choice is made.
Think at the Margin - ANS Thinking about what the next step or an additional action means
for a person.
1
Page
@COPYRIGHT @THEBRIGHT 2025/2026
, Marginal Benefit - ANS 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 ) - ANS Everyone faces tradeoffs
2nd (Principles of Economics ) - ANS The cost of something is determined by what you give
up to get it.
3rd (Principles of Economics ) - ANS Rational people think at the margin.
4th (Principles of Economics ) - ANS People respond to incentives.
5th (Principles of Economics ) - ANS Trade can benefit everyone.
6th (Principles of Economics ) - ANS Markets are a sound method of organizing economic
activity.
7th (Principles of Economics ) - ANS Government may be able to improve market outcomes.
8th (Principles of Economics ) - ANS A nation's standard of living depends on its ability to
produce.
9th (Principles of Economics ) - ANS Printing too much money causes prices to rise.
10th (Principles of Economics ) - ANS There is short-run tradeoff between inflation and
unemployment.
2
Page
@COPYRIGHT @THEBRIGHT 2025/2026
, Economic Systems - ANS A system of the production, resource allocation, and distribution of
goods and services within a society or give geographic area.
Traditional Economy - ANS A economic system that relies on customs, history. and time-
honored beliefs. Guides economic decisions such as production and distribution.
Command Economy - ANS An economic system in which production, investment, prices, and
incomes are determined centrally by a government.
(Centralized)
Market Economy - ANS 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 - ANS 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 - ANS The study of economics concerned with what is and what will
happen if a course of action is taken or not taken.
Normative Economics - ANS The study of economics with what is and what will happen if a
course of action is taken or not taken.
Economic Models - ANS A simplified version of reality that allows people to observe,
understand and make predictions about economic behavior.
3
Page
Economic Indicators - ANS A statistic about an economic activity.
@COPYRIGHT @THEBRIGHT 2025/2026
