WGU D089 PRINCIPLES OF ECONOMICS TEST
BANK 2026 FULL QUESTIONS AND CORRECT
ANSWERS GRADED A+
◉ Factors of Production. Answer: Describes theninputs used in the
production of goods or services to make an economic profit.
◉ Macroeconomics. Answer: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
◉ Microeconomics. Answer: A branch of economics that studies the
behavior of individuals, and firms in making decisions regarding the
allocation of scarce resources and the interactions among these
individuals and firms.
◉ Scarcity. Answer: The basic economic problem, the gap between
limited, scarce, resources and theoretically limitless wants
◉ Opportunity Cost. Answer: The next best alternative that is given up
when a choice is made.
◉ Think at the Margin. Answer: Thinking about what the next step or an
additional action means for a person.
,◉ Marginal Benefit. Answer: The incremental increase in the benefit to
a consumer caused by the consumption of one additional unit of a good
or service.
◉ 1st (Principles of Economics ). Answer: Everyone faces tradeoffs
◉ 2nd (Principles of Economics ). Answer: The cost of something is
determined by what you give up to get it.
◉ 3rd (Principles of Economics ). Answer: Rational people think at the
margin.
◉ 4th (Principles of Economics ). Answer: People respond to incentives.
◉ 5th (Principles of Economics ). Answer: Trade can benefit everyone.
◉ 6th (Principles of Economics ). Answer: Markets are a sound method
of organizing economic activity.
◉ 7th (Principles of Economics ). Answer: Government may be able to
improve market outcomes.
,◉ 8th (Principles of Economics ). Answer: A nation's standard of living
depends on its ability to produce.
◉ 9th (Principles of Economics ). Answer: Printing too much money
causes prices to rise.
◉ 10th (Principles of Economics ). Answer: There is short-run tradeoff
between inflation and unemployment.
◉ Economic Systems. Answer: A system of the production, resource
allocation, and distribution of goods and services within a society or
give geographic area.
◉ Traditional Economy. Answer: A economic system that relies on
customs, history. and time-honored beliefs. Guides economic decisions
such as production and distribution.
◉ Command Economy. Answer: An economic system in which
production, investment, prices, and incomes are determined centrally by
a government.
(Centralized)
, ◉ Market Economy. Answer: An economic system in which the
decisions regarding investment, production, and distribution are guided
by the price signals created by the forces of supply and demand
(Decentralized)
◉ Mixed Economy. Answer: An economic system in which both private
enterprise and a degree of state monopoly (usually in public services,
defense, infrastructure, and basic industries) coexist.
◉ Positive Economics. Answer: The study of economics concerned with
what is and what will happen if a course of action is taken or not taken.
◉ Normative Economics. Answer: The study of economics with what is
and what will happen if a course of action is taken or not taken.
◉ Economic Models. Answer: A simplified version of reality that allows
people to observe, understand and make predictions about economic
behavior.
◉ Economic Indicators. Answer: A statistic about an economic activity.
◉ Circular Flow Model. Answer: An economic model that shows the
flow of money and goods through the economy. The most common form
BANK 2026 FULL QUESTIONS AND CORRECT
ANSWERS GRADED A+
◉ Factors of Production. Answer: Describes theninputs used in the
production of goods or services to make an economic profit.
◉ Macroeconomics. Answer: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
◉ Microeconomics. Answer: A branch of economics that studies the
behavior of individuals, and firms in making decisions regarding the
allocation of scarce resources and the interactions among these
individuals and firms.
◉ Scarcity. Answer: The basic economic problem, the gap between
limited, scarce, resources and theoretically limitless wants
◉ Opportunity Cost. Answer: The next best alternative that is given up
when a choice is made.
◉ Think at the Margin. Answer: Thinking about what the next step or an
additional action means for a person.
,◉ Marginal Benefit. Answer: The incremental increase in the benefit to
a consumer caused by the consumption of one additional unit of a good
or service.
◉ 1st (Principles of Economics ). Answer: Everyone faces tradeoffs
◉ 2nd (Principles of Economics ). Answer: The cost of something is
determined by what you give up to get it.
◉ 3rd (Principles of Economics ). Answer: Rational people think at the
margin.
◉ 4th (Principles of Economics ). Answer: People respond to incentives.
◉ 5th (Principles of Economics ). Answer: Trade can benefit everyone.
◉ 6th (Principles of Economics ). Answer: Markets are a sound method
of organizing economic activity.
◉ 7th (Principles of Economics ). Answer: Government may be able to
improve market outcomes.
,◉ 8th (Principles of Economics ). Answer: A nation's standard of living
depends on its ability to produce.
◉ 9th (Principles of Economics ). Answer: Printing too much money
causes prices to rise.
◉ 10th (Principles of Economics ). Answer: There is short-run tradeoff
between inflation and unemployment.
◉ Economic Systems. Answer: A system of the production, resource
allocation, and distribution of goods and services within a society or
give geographic area.
◉ Traditional Economy. Answer: A economic system that relies on
customs, history. and time-honored beliefs. Guides economic decisions
such as production and distribution.
◉ Command Economy. Answer: An economic system in which
production, investment, prices, and incomes are determined centrally by
a government.
(Centralized)
, ◉ Market Economy. Answer: An economic system in which the
decisions regarding investment, production, and distribution are guided
by the price signals created by the forces of supply and demand
(Decentralized)
◉ Mixed Economy. Answer: An economic system in which both private
enterprise and a degree of state monopoly (usually in public services,
defense, infrastructure, and basic industries) coexist.
◉ Positive Economics. Answer: The study of economics concerned with
what is and what will happen if a course of action is taken or not taken.
◉ Normative Economics. Answer: The study of economics with what is
and what will happen if a course of action is taken or not taken.
◉ Economic Models. Answer: A simplified version of reality that allows
people to observe, understand and make predictions about economic
behavior.
◉ Economic Indicators. Answer: A statistic about an economic activity.
◉ Circular Flow Model. Answer: An economic model that shows the
flow of money and goods through the economy. The most common form
