WGU D089 PRINCIPLES OF ECONOMICS
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS
Traditional Economy - ANS A system where individuals make decisions based on traditions,
beliefs, and customs.
Command Economy - ANS A system where the government makes all the decisions.
Market Economy - ANS A system where businesses make decisions based on consumer
demand. Innovation is encouraged and rewarded.
Mixed Economy - ANS A system where businesses make decisions based on consumer
demand, but the government makes decisions in terms of regulations, consumer safety, and
environment.
Positive Economics - ANS Focuses primarily on facts, and they can be tested.
Normative Economics - ANS Opinions that express value or normative judgments about
economic fairness.
Production Possibilities Frontier (PPF) - ANS Shows the alternative combinations of two
goods or services that an economy can produce with the given resources and technology when
the resources are fully efficiently used at a given point in time. Slopes downward because it is
pg. 1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, showing an increase in the number of units of the product X. Points below the PPF are
attainable.
Production Possibilities Curve (PPC) - ANS Presents potential prospects to produce a pair of
products. All points on the curve are attainable and efficient. This is when you are using your
resources to the fullest.
Homogeneous - ANS Consisting of parts all of the same kind.
Heterogeneous - ANS A resource having two different forms or skills.
Law of Increasing Opportunity Costs - ANS When all resources are being used, an increase in
the production of one good will lead to greater forgone production of another good.
Demand Schedule - ANS A chart that shows the number of goods or services demanded at
specific prices.
Law of Demand - ANS The common relationship that a higher price leads to a lower quantity
demanded of a certain good or service and a lower price leads to a higher quantity demanded
while all other variables are held constant.
Demand Curve - ANS Shows how much people will want at different prices. (Downwards
Price, Increase Quantity)-
Factors Affecting Demand That Make It Shift - ANS Tastes and Preferences, Price of
Complements (Bread and Jam, Printer and Ink), Price of Substitutes, Income, Expectation (of
future prices) (Inflation, News), Population (More people, Demand is higher)
Supply Curve - ANS Shows how much sellers will supply at different prices. (Upwards Price,
Increase Quantity)
pg. 2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS
Traditional Economy - ANS A system where individuals make decisions based on traditions,
beliefs, and customs.
Command Economy - ANS A system where the government makes all the decisions.
Market Economy - ANS A system where businesses make decisions based on consumer
demand. Innovation is encouraged and rewarded.
Mixed Economy - ANS A system where businesses make decisions based on consumer
demand, but the government makes decisions in terms of regulations, consumer safety, and
environment.
Positive Economics - ANS Focuses primarily on facts, and they can be tested.
Normative Economics - ANS Opinions that express value or normative judgments about
economic fairness.
Production Possibilities Frontier (PPF) - ANS Shows the alternative combinations of two
goods or services that an economy can produce with the given resources and technology when
the resources are fully efficiently used at a given point in time. Slopes downward because it is
pg. 1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, showing an increase in the number of units of the product X. Points below the PPF are
attainable.
Production Possibilities Curve (PPC) - ANS Presents potential prospects to produce a pair of
products. All points on the curve are attainable and efficient. This is when you are using your
resources to the fullest.
Homogeneous - ANS Consisting of parts all of the same kind.
Heterogeneous - ANS A resource having two different forms or skills.
Law of Increasing Opportunity Costs - ANS When all resources are being used, an increase in
the production of one good will lead to greater forgone production of another good.
Demand Schedule - ANS A chart that shows the number of goods or services demanded at
specific prices.
Law of Demand - ANS The common relationship that a higher price leads to a lower quantity
demanded of a certain good or service and a lower price leads to a higher quantity demanded
while all other variables are held constant.
Demand Curve - ANS Shows how much people will want at different prices. (Downwards
Price, Increase Quantity)-
Factors Affecting Demand That Make It Shift - ANS Tastes and Preferences, Price of
Complements (Bread and Jam, Printer and Ink), Price of Substitutes, Income, Expectation (of
future prices) (Inflation, News), Population (More people, Demand is higher)
Supply Curve - ANS Shows how much sellers will supply at different prices. (Upwards Price,
Increase Quantity)
pg. 2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
