D089 UNIT 2 ECONOMIC WAY OF
THINKING | STUDY GUIDE | QUESTIONS
AND ANSWERS | EXAM PREP | GRADED A+
| GUARANTEED SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Economics studies human actions and decisions related to the production and distribution of scarce
resources.
There are two main areas of economics macroeconomics (focusing on large economic systems) and microeconomics (focusing
on organizations and individuals).
Individuals, organizations, governments, and countries must make decisions about how, what, and for whom to produce.
The ten principles of economics are interrelated and describe how people make decisions and interact and how the
economy acts as a whole.
What to produce? A property owner has 500 acres of flat land and has been approached by two different
businesses. One business wants to drill for oil, and the other wants to raise cattle.
How to produce it? A well-established company has been producing goods and wants to create a new line
of production. The company needs to decide whether it should use a current factory or
find a new location.
For whom to produce? To address environmental concerns, Congress is considering a bill that would increase
the price of electricity generated by coal. Increasing the price of electricity creates a
problem for low-income households.
Which scenario matches Principle 4 of economics—people A sales manager offers a higher percentage of commission for a product that is not
respond to incentives? selling well.
Principle 5: Trade can leave everyone in a better position. A farmer is really good at growing corn and exchanges the corn for meat and supplies.
Principle 6: Markets are a sound method of organizing Multiple producers and consumers exchange goods and services.
economic activity.
Principle 7: Governments sometimes have the ability to better Companies face regulation when they create a monopoly in their industry
market outcomes.
What is a consequence of a government printing more decreased unemployment. Causes inflation. In the short run, this can lead to more jobs.
money?
THINKING | STUDY GUIDE | QUESTIONS
AND ANSWERS | EXAM PREP | GRADED A+
| GUARANTEED SUCCESS
Updated Questions and Answers | 100% Verified Exam Prep
, Economics studies human actions and decisions related to the production and distribution of scarce
resources.
There are two main areas of economics macroeconomics (focusing on large economic systems) and microeconomics (focusing
on organizations and individuals).
Individuals, organizations, governments, and countries must make decisions about how, what, and for whom to produce.
The ten principles of economics are interrelated and describe how people make decisions and interact and how the
economy acts as a whole.
What to produce? A property owner has 500 acres of flat land and has been approached by two different
businesses. One business wants to drill for oil, and the other wants to raise cattle.
How to produce it? A well-established company has been producing goods and wants to create a new line
of production. The company needs to decide whether it should use a current factory or
find a new location.
For whom to produce? To address environmental concerns, Congress is considering a bill that would increase
the price of electricity generated by coal. Increasing the price of electricity creates a
problem for low-income households.
Which scenario matches Principle 4 of economics—people A sales manager offers a higher percentage of commission for a product that is not
respond to incentives? selling well.
Principle 5: Trade can leave everyone in a better position. A farmer is really good at growing corn and exchanges the corn for meat and supplies.
Principle 6: Markets are a sound method of organizing Multiple producers and consumers exchange goods and services.
economic activity.
Principle 7: Governments sometimes have the ability to better Companies face regulation when they create a monopoly in their industry
market outcomes.
What is a consequence of a government printing more decreased unemployment. Causes inflation. In the short run, this can lead to more jobs.
money?
