WGU C211 LATEST VERSION WITH GUARANTEED
ANSWERS
Totalitarianism - ANSWER -One person or party exercises absolute political control over the
population.
Civil law - ANSWER -Law that uses comprehensive statutes and codes as a primary means to
form legal judgments.
Common law - ANSWER -Law shaped by precedents and traditions from previous judicial
decisions.
Theocratic law - ANSWER -A legal system based on religious teachings.
How do civil, common and theocratic laws compare? - ANSWER -Relative to civil law, common
law has more flexibility because judges have to resolve specific disputes based on their
interpretation of the law. Civil law has less flexibility because judges only have the power to
apply the law.
Property right - ANSWER -The legal rights to use an economic resource and to derive income
and benefits from it. Can be used as collateral for starting a firm; not as common in developing
countries, therefore hindering economic growth.
Intellectual property right - ANSWER -Rights associated with the ownership. They primarily
include rights associated with patents, copyrights, and trademarks.
,Market economy - ANSWER -One that is characterized by the "invisible hand" of market forces-
all factors of production should be privately owned.
Command economy - ANSWER -One that is defined by a government taking all factors of
production to be government-owned or state-owned, and all supply, demand, and pricing are
planned by the government.
Mixed economy - ANSWER -One has elements of both a market economy and a command
economy. It boils down to the relative distribution of market forces versus command forces.
Indifference curve - ANSWER -A curve that shows consumption bundles that give the consumer
the same level of satisfaction (i.e. combinations of pizza and Pepsi with which the consumer is
equally satisfied.)
Four properties of an indifference curve - ANSWER -(1) Higher indifference curves are preferred
to lower ones. People usually prefer to consume more goods rather than less.
(2) Indifference curves are downward sloping. The slope of an indifference curve reflects the
rate at which the consumer is willing to substitute one good for the other.
(3) Indifference curves do not cross.
(4) Indifference curves are bowed inward. The slope of an indifference curve is the marginal rate
of substitution—the rate at which the consumer is willing to trade off one good for the other.
Marginal rate of substitution. - ANSWER -The rate at which the consumer is willing to trade off
one good for the other (i.e. how much Pepsi the consumer requires to be compensated for a
one-unit reduction in pizza consumption)
Budget constraint - ANSWER -The consumption bundles that the consumer can afford.
How might a budget constraint be impacted by an increase in income? - ANSWER -Additional
bundles could be consumed with an increase in income.
, Graphical elements needed to determine a consumer's optimal point of consumption - ANSWER
-Indifference curve and budget constraint.
How is a consumer's optimal point of consumption determined precisely? What is the condition
that must be met? - ANSWER -The point at which this indifference curve and the budget
constraint touch (the best combination of pizza and Pepsi available to the consumer.) The
marginal rate of substitution equals the relative price of the two goods.
Marginal cost - ANSWER -The increase in total cost that arises from an extra unit of production
How is marginal cost related to total cost? - ANSWER -The portion of total cost resulting from an
extra unit of production.
Formula to calculate marginal cost - ANSWER -Change in total cost divided by change in quantity
If Dave's company has a total cost of $100 when quantity output is 5, and a total cost of $115
when quantity output is 6, what is the marginal cost of producing the 6th unit? - ANSWER -$15
Total cost is made of two types of costs, what are they? - ANSWER -Fixed and Variable.
How does a firm determine to shut down in the short-run? What rule characterizes this? -
ANSWER -If the revenue that it would earn from producing is less than its variable costs of
production. P<AVC (Price is less than Avg Variable Cost)
Market structure characterized as being "price takers" - ANSWER -Competitive markets
Price taker - ANSWER -One who must accept the price as the market determines
ANSWERS
Totalitarianism - ANSWER -One person or party exercises absolute political control over the
population.
Civil law - ANSWER -Law that uses comprehensive statutes and codes as a primary means to
form legal judgments.
Common law - ANSWER -Law shaped by precedents and traditions from previous judicial
decisions.
Theocratic law - ANSWER -A legal system based on religious teachings.
How do civil, common and theocratic laws compare? - ANSWER -Relative to civil law, common
law has more flexibility because judges have to resolve specific disputes based on their
interpretation of the law. Civil law has less flexibility because judges only have the power to
apply the law.
Property right - ANSWER -The legal rights to use an economic resource and to derive income
and benefits from it. Can be used as collateral for starting a firm; not as common in developing
countries, therefore hindering economic growth.
Intellectual property right - ANSWER -Rights associated with the ownership. They primarily
include rights associated with patents, copyrights, and trademarks.
,Market economy - ANSWER -One that is characterized by the "invisible hand" of market forces-
all factors of production should be privately owned.
Command economy - ANSWER -One that is defined by a government taking all factors of
production to be government-owned or state-owned, and all supply, demand, and pricing are
planned by the government.
Mixed economy - ANSWER -One has elements of both a market economy and a command
economy. It boils down to the relative distribution of market forces versus command forces.
Indifference curve - ANSWER -A curve that shows consumption bundles that give the consumer
the same level of satisfaction (i.e. combinations of pizza and Pepsi with which the consumer is
equally satisfied.)
Four properties of an indifference curve - ANSWER -(1) Higher indifference curves are preferred
to lower ones. People usually prefer to consume more goods rather than less.
(2) Indifference curves are downward sloping. The slope of an indifference curve reflects the
rate at which the consumer is willing to substitute one good for the other.
(3) Indifference curves do not cross.
(4) Indifference curves are bowed inward. The slope of an indifference curve is the marginal rate
of substitution—the rate at which the consumer is willing to trade off one good for the other.
Marginal rate of substitution. - ANSWER -The rate at which the consumer is willing to trade off
one good for the other (i.e. how much Pepsi the consumer requires to be compensated for a
one-unit reduction in pizza consumption)
Budget constraint - ANSWER -The consumption bundles that the consumer can afford.
How might a budget constraint be impacted by an increase in income? - ANSWER -Additional
bundles could be consumed with an increase in income.
, Graphical elements needed to determine a consumer's optimal point of consumption - ANSWER
-Indifference curve and budget constraint.
How is a consumer's optimal point of consumption determined precisely? What is the condition
that must be met? - ANSWER -The point at which this indifference curve and the budget
constraint touch (the best combination of pizza and Pepsi available to the consumer.) The
marginal rate of substitution equals the relative price of the two goods.
Marginal cost - ANSWER -The increase in total cost that arises from an extra unit of production
How is marginal cost related to total cost? - ANSWER -The portion of total cost resulting from an
extra unit of production.
Formula to calculate marginal cost - ANSWER -Change in total cost divided by change in quantity
If Dave's company has a total cost of $100 when quantity output is 5, and a total cost of $115
when quantity output is 6, what is the marginal cost of producing the 6th unit? - ANSWER -$15
Total cost is made of two types of costs, what are they? - ANSWER -Fixed and Variable.
How does a firm determine to shut down in the short-run? What rule characterizes this? -
ANSWER -If the revenue that it would earn from producing is less than its variable costs of
production. P<AVC (Price is less than Avg Variable Cost)
Market structure characterized as being "price takers" - ANSWER -Competitive markets
Price taker - ANSWER -One who must accept the price as the market determines
