D089 / D 089 Objective Assessment (Latest
Update ) Principles of Economics |
Module Questions and Answers | Grade A |
100% Correct - WGU
Question: What is the primary focus of economics?
Answer: Managing scarce resources to satisfy unlimited wants
Rationale: Economics studies how societies allocate limited resources to meet infinite
demands.
Question: What does opportunity cost represent?
Answer: The value of the next best alternative foregone
Rationale: Opportunity cost measures what is sacrificed when choosing one option over
another.
Question: What is meant by scarcity in economics?
Answer: Limited resources relative to unlimited needs and wants
Rationale: Scarcity requires societies to make choices about resource allocation.
Question: What defines a market economy?
Answer: An economy driven by supply and demand with minimal government role
Rationale: Market economies rely on consumer and producer interactions to set prices
and output.
Question: What does the circular flow model depict?
Answer: The flow of money, goods, and services between households and firms
Rationale: The model shows households providing labor and receiving income, while
firms produce goods and pay wages.
, Question: What is a capital good?
Answer: A good used to produce other goods or services
Rationale: Capital goods, like factories, are used in production, not for direct
consumption.
Question: What is a cartel?
Answer: Firms colluding to restrict output and raise prices
Rationale: Cartels act like monopolies by coordinating to limit competition.
Question: What is comparative advantage?
Answer: Producing a good at a lower opportunity cost than others
Rationale: Comparative advantage drives specialization and trade based on relative
efficiency.
Question: What is the role of a central bank?
Answer: To manage money supply and stabilize the economy
Rationale: Central banks, like the Federal Reserve, use monetary policy to control
inflation and growth.
Question: What is commodity money?
Answer: Money with intrinsic value from its use as a commodity
Rationale: Commodity money, like silver, has value beyond its role as currency.
Question: What characterizes a command economy?
Answer: Government control over production and prices
Rationale: Command economies centralize economic decisions, unlike market systems.
Question: What is marginal thinking in economics?
Answer: Decision-making based on incremental changes
Rationale: Marginal thinking evaluates additional benefits versus additional costs.
Update ) Principles of Economics |
Module Questions and Answers | Grade A |
100% Correct - WGU
Question: What is the primary focus of economics?
Answer: Managing scarce resources to satisfy unlimited wants
Rationale: Economics studies how societies allocate limited resources to meet infinite
demands.
Question: What does opportunity cost represent?
Answer: The value of the next best alternative foregone
Rationale: Opportunity cost measures what is sacrificed when choosing one option over
another.
Question: What is meant by scarcity in economics?
Answer: Limited resources relative to unlimited needs and wants
Rationale: Scarcity requires societies to make choices about resource allocation.
Question: What defines a market economy?
Answer: An economy driven by supply and demand with minimal government role
Rationale: Market economies rely on consumer and producer interactions to set prices
and output.
Question: What does the circular flow model depict?
Answer: The flow of money, goods, and services between households and firms
Rationale: The model shows households providing labor and receiving income, while
firms produce goods and pay wages.
, Question: What is a capital good?
Answer: A good used to produce other goods or services
Rationale: Capital goods, like factories, are used in production, not for direct
consumption.
Question: What is a cartel?
Answer: Firms colluding to restrict output and raise prices
Rationale: Cartels act like monopolies by coordinating to limit competition.
Question: What is comparative advantage?
Answer: Producing a good at a lower opportunity cost than others
Rationale: Comparative advantage drives specialization and trade based on relative
efficiency.
Question: What is the role of a central bank?
Answer: To manage money supply and stabilize the economy
Rationale: Central banks, like the Federal Reserve, use monetary policy to control
inflation and growth.
Question: What is commodity money?
Answer: Money with intrinsic value from its use as a commodity
Rationale: Commodity money, like silver, has value beyond its role as currency.
Question: What characterizes a command economy?
Answer: Government control over production and prices
Rationale: Command economies centralize economic decisions, unlike market systems.
Question: What is marginal thinking in economics?
Answer: Decision-making based on incremental changes
Rationale: Marginal thinking evaluates additional benefits versus additional costs.
