WGU D089 PRINCIPLES OF ECONOMICS
COMPREHENSIVE EXAM PREPARATION QUESTIONS
200 | ALL TOPICS COVERED | LATEST VERSION
Question 1
What is the study of how humans make decisions in the face of
scarcity?
A) Macroeconomics
B) Econometrics
C) Economics
D) Normative Economics
E) Positive Economics
Correct Answer: C) Economics
Rationale: Economics is defined as the study of how humans make
decisions in the face of scarcity. It examines how individuals,
businesses, and societies allocate limited resources to satisfy unlimited
wants and needs.
Question 2
Which factor of production refers to the physical and intellectual
contributions of people to the production process?
A) Capital
B) Land
C) Entrepreneurship
,D) Labor
E) Technology
Correct Answer: D) Labor
Rationale: Labor represents the human effort, both physical and mental,
used in the production of goods and services. It is one of the four
factors of production, along with land, capital, and entrepreneurship.
Question 3
What do economists call the inputs used in the production of goods or
services to make an economic profit?
A) Factors of Production
B) Economic Indicators
C) Market Forces
D) Opportunity Costs
E) Marginal Utilities
Correct Answer: A) Factors of Production
Rationale: Factors of production are the resources used to produce
goods and services. These include land, labor, capital, and
entrepreneurship. They are the building blocks of all economic activity.
Question 4
Which branch of economics studies the behavior of individuals and
firms in making decisions regarding the allocation of scarce resources?
A) Macroeconomics
B) Positive Economics
C) Normative Economics
D) Microeconomics
E) Econometrics
Correct Answer: D) Microeconomics
Rationale: Microeconomics focuses on the actions of individual agents
,such as consumers, workers, and firms. It examines how these entities
make decisions about resource allocation and how they interact in
specific markets.
Question 5
What is the fundamental economic problem that arises because
resources are limited but human wants are unlimited?
A) Inflation
B) Unemployment
C) Scarcity
D) Opportunity Cost
E) Marginal Analysis
Correct Answer: C) Scarcity
Rationale: Scarcity is the central problem in economics. It exists because
resources (land, labor, capital) are finite while human desires are
infinite, forcing societies to make choices about how to allocate those
resources.
Question 6
A student decides to work an extra shift at their job instead of attending
a concert. The enjoyment and value of the concert represents the
student's:
A) Marginal Benefit
B) Economic Profit
C) Sunk Cost
D) Opportunity Cost
E) Comparative Advantage
Correct Answer: D) Opportunity Cost
Rationale: Opportunity cost is the value of the next best alternative
, foregone when a choice is made. By choosing to work, the student gives
up the concert, which was their next best option.
Question 7
What concept describes the additional satisfaction a consumer receives
from consuming one more unit of a good or service?
A) Total Utility
B) Marginal Cost
C) Marginal Benefit
D) Average Utility
E) Consumer Surplus
Correct Answer: C) Marginal Benefit
Rationale: Marginal benefit refers to the additional satisfaction or utility
a consumer gains from consuming one additional unit of a good.
Rational decision-makers compare this marginal benefit to the marginal
cost when making choices.
Question 8
According to economic principles, why do rational people "think at the
margin"?
A) They ignore all costs associated with their decisions
B) They want to maximize total cost
C) They focus solely on the very first unit consumed
D) They make decisions based on small incremental adjustments to an
existing plan
E) They never respond to incentives
Correct Answer: D) They make decisions based on small incremental
adjustments to an existing plan
Rationale: Thinking at the margin involves evaluating the additional
COMPREHENSIVE EXAM PREPARATION QUESTIONS
200 | ALL TOPICS COVERED | LATEST VERSION
Question 1
What is the study of how humans make decisions in the face of
scarcity?
A) Macroeconomics
B) Econometrics
C) Economics
D) Normative Economics
E) Positive Economics
Correct Answer: C) Economics
Rationale: Economics is defined as the study of how humans make
decisions in the face of scarcity. It examines how individuals,
businesses, and societies allocate limited resources to satisfy unlimited
wants and needs.
Question 2
Which factor of production refers to the physical and intellectual
contributions of people to the production process?
A) Capital
B) Land
C) Entrepreneurship
,D) Labor
E) Technology
Correct Answer: D) Labor
Rationale: Labor represents the human effort, both physical and mental,
used in the production of goods and services. It is one of the four
factors of production, along with land, capital, and entrepreneurship.
Question 3
What do economists call the inputs used in the production of goods or
services to make an economic profit?
A) Factors of Production
B) Economic Indicators
C) Market Forces
D) Opportunity Costs
E) Marginal Utilities
Correct Answer: A) Factors of Production
Rationale: Factors of production are the resources used to produce
goods and services. These include land, labor, capital, and
entrepreneurship. They are the building blocks of all economic activity.
Question 4
Which branch of economics studies the behavior of individuals and
firms in making decisions regarding the allocation of scarce resources?
A) Macroeconomics
B) Positive Economics
C) Normative Economics
D) Microeconomics
E) Econometrics
Correct Answer: D) Microeconomics
Rationale: Microeconomics focuses on the actions of individual agents
,such as consumers, workers, and firms. It examines how these entities
make decisions about resource allocation and how they interact in
specific markets.
Question 5
What is the fundamental economic problem that arises because
resources are limited but human wants are unlimited?
A) Inflation
B) Unemployment
C) Scarcity
D) Opportunity Cost
E) Marginal Analysis
Correct Answer: C) Scarcity
Rationale: Scarcity is the central problem in economics. It exists because
resources (land, labor, capital) are finite while human desires are
infinite, forcing societies to make choices about how to allocate those
resources.
Question 6
A student decides to work an extra shift at their job instead of attending
a concert. The enjoyment and value of the concert represents the
student's:
A) Marginal Benefit
B) Economic Profit
C) Sunk Cost
D) Opportunity Cost
E) Comparative Advantage
Correct Answer: D) Opportunity Cost
Rationale: Opportunity cost is the value of the next best alternative
, foregone when a choice is made. By choosing to work, the student gives
up the concert, which was their next best option.
Question 7
What concept describes the additional satisfaction a consumer receives
from consuming one more unit of a good or service?
A) Total Utility
B) Marginal Cost
C) Marginal Benefit
D) Average Utility
E) Consumer Surplus
Correct Answer: C) Marginal Benefit
Rationale: Marginal benefit refers to the additional satisfaction or utility
a consumer gains from consuming one additional unit of a good.
Rational decision-makers compare this marginal benefit to the marginal
cost when making choices.
Question 8
According to economic principles, why do rational people "think at the
margin"?
A) They ignore all costs associated with their decisions
B) They want to maximize total cost
C) They focus solely on the very first unit consumed
D) They make decisions based on small incremental adjustments to an
existing plan
E) They never respond to incentives
Correct Answer: D) They make decisions based on small incremental
adjustments to an existing plan
Rationale: Thinking at the margin involves evaluating the additional
