WGU Economics D089 PA Questions |\ |\ |\ |\ |\
WIT ANSWERS |\
A local government is making public policy decisions about
|\ |\ |\ |\ |\ |\ |\ |\ |\
spending funds. The residents have differing opinions on whether
|\ |\ |\ |\ |\ |\ |\ |\
the funds should be used for road repair, school expansion,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
health care increases, or construction of a senior center. The
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
local government must decide the priority.
|\ |\ |\ |\ |\
Which economic question is this decision an example of?
|\ |\ |\ |\ |\ |\ |\ |\
A) What to produce
|\ |\ |\
B) Why to produce it
|\ |\ |\ |\
C) How to produce it
|\ |\ |\ |\
D) When to produce it
|\ |\ |\ |\
What to produce |\ |\
A newspaper is trying to help citizens understand economic
|\ |\ |\ |\ |\ |\ |\ |\ |\
principles. Which misconception should the article address? |\ |\ |\ |\ |\ |\
A) Consistent rising prices often results in inflation of goods and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
services
B) Printing too much money causes the price of goods to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
increase.
C) Increasing the money supply raises the standard of living for
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
consumers in the long run. |\ |\ |\ |\
D) Inflation decreases the value of money and makes goods more
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
expensive.
|\
Increasing the money supply raises the standard of living for|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
consumers in the long run |\ |\ |\ |\
,Which scenario covers a topic included in microeconomics?
|\ |\ |\ |\ |\ |\ |\
A) As a result of a hard freeze, the price of cherries increases.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B) An economist compares the gross domestic product between
|\ |\ |\ |\ |\ |\ |\ |\ |\
the United States and China.
|\ |\ |\ |\
C) The government changes the tax policy to boost economic
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
growth in the United States. |\ |\ |\ |\
D) The Federal Reserve responds to an increase in inflation by
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
changing the interest rate. |\ |\ |\
As a result of a hard freeze, the price of cherries increases.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Which shows the flow of payments between house holds and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
firms?
A) Externalities in production
|\ |\ |\
B) Value-added production
|\ |\
C) The Circular Flow Model
|\ |\ |\ |\
D) The production possibilities model
|\ |\ |\ |\
The Circular Flow Model
|\ |\ |\
What accurately characterizes capital?
|\ |\ |\
A) It is in the form of cash.
|\ |\ |\ |\ |\ |\ |\
B) It is reliant on a natural resource.
|\ |\ |\ |\ |\ |\ |\
C) It must be in the form of physical objects.
|\ |\ |\ |\ |\ |\ |\ |\ |\
D) It can be in the form of intellectual discoveries.
|\ |\ |\ |\ |\ |\ |\ |\ |\
It can be in the form of intellectual discoveries.
|\ |\ |\ |\ |\ |\ |\ |\
, Why is the circular flow model used?
|\ |\ |\ |\ |\ |\
A) To describe how factors of production affect growth and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
decline
B) To illustrate how capitalism and socialism differ as an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economic form |\
C) To describe the interaction of businesses and households in
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
markets
D) To illustrate primarily the use of labor and natural resources in
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
an economy
|\ |\
To describe the interaction of businesses and households in
|\ |\ |\ |\ |\ |\ |\ |\ |\
markets
What is a result of increasing opportunity costs?
|\ |\ |\ |\ |\ |\ |\
A) To consume more of one good, a consumer becomes more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more efficient.
|\ |\
B) To produce more of one good, the economy gives up more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more of other goods.
|\ |\ |\ |\
C) As an economy produces a greater variety of goods, the cost
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of each good increases.
|\ |\ |\
D) When consumers do not want what producers make, increased
|\ |\ |\ |\ |\ |\ |\ |\ |\
opportunity for trade is missed.
|\ |\ |\ |\ |\
To produce more of one good, the economy gives up more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more of other goods. |\ |\ |\
How would a production possibility frontier be drawn for an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economy that produces two goods with homogeneous resources?
|\ |\ |\ |\ |\ |\ |\
A) As a constant slope, downward from left to right
|\ |\ |\ |\ |\ |\ |\ |\ |\
B) As a ray out of the origin, with a constant slope
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
C) As a semicircle centered on the origin, sloping downward from
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
WIT ANSWERS |\
A local government is making public policy decisions about
|\ |\ |\ |\ |\ |\ |\ |\ |\
spending funds. The residents have differing opinions on whether
|\ |\ |\ |\ |\ |\ |\ |\
the funds should be used for road repair, school expansion,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
health care increases, or construction of a senior center. The
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
local government must decide the priority.
|\ |\ |\ |\ |\
Which economic question is this decision an example of?
|\ |\ |\ |\ |\ |\ |\ |\
A) What to produce
|\ |\ |\
B) Why to produce it
|\ |\ |\ |\
C) How to produce it
|\ |\ |\ |\
D) When to produce it
|\ |\ |\ |\
What to produce |\ |\
A newspaper is trying to help citizens understand economic
|\ |\ |\ |\ |\ |\ |\ |\ |\
principles. Which misconception should the article address? |\ |\ |\ |\ |\ |\
A) Consistent rising prices often results in inflation of goods and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
services
B) Printing too much money causes the price of goods to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
increase.
C) Increasing the money supply raises the standard of living for
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
consumers in the long run. |\ |\ |\ |\
D) Inflation decreases the value of money and makes goods more
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
expensive.
|\
Increasing the money supply raises the standard of living for|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
consumers in the long run |\ |\ |\ |\
,Which scenario covers a topic included in microeconomics?
|\ |\ |\ |\ |\ |\ |\
A) As a result of a hard freeze, the price of cherries increases.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B) An economist compares the gross domestic product between
|\ |\ |\ |\ |\ |\ |\ |\ |\
the United States and China.
|\ |\ |\ |\
C) The government changes the tax policy to boost economic
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
growth in the United States. |\ |\ |\ |\
D) The Federal Reserve responds to an increase in inflation by
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
changing the interest rate. |\ |\ |\
As a result of a hard freeze, the price of cherries increases.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Which shows the flow of payments between house holds and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
firms?
A) Externalities in production
|\ |\ |\
B) Value-added production
|\ |\
C) The Circular Flow Model
|\ |\ |\ |\
D) The production possibilities model
|\ |\ |\ |\
The Circular Flow Model
|\ |\ |\
What accurately characterizes capital?
|\ |\ |\
A) It is in the form of cash.
|\ |\ |\ |\ |\ |\ |\
B) It is reliant on a natural resource.
|\ |\ |\ |\ |\ |\ |\
C) It must be in the form of physical objects.
|\ |\ |\ |\ |\ |\ |\ |\ |\
D) It can be in the form of intellectual discoveries.
|\ |\ |\ |\ |\ |\ |\ |\ |\
It can be in the form of intellectual discoveries.
|\ |\ |\ |\ |\ |\ |\ |\
, Why is the circular flow model used?
|\ |\ |\ |\ |\ |\
A) To describe how factors of production affect growth and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
decline
B) To illustrate how capitalism and socialism differ as an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economic form |\
C) To describe the interaction of businesses and households in
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
markets
D) To illustrate primarily the use of labor and natural resources in
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
an economy
|\ |\
To describe the interaction of businesses and households in
|\ |\ |\ |\ |\ |\ |\ |\ |\
markets
What is a result of increasing opportunity costs?
|\ |\ |\ |\ |\ |\ |\
A) To consume more of one good, a consumer becomes more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more efficient.
|\ |\
B) To produce more of one good, the economy gives up more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more of other goods.
|\ |\ |\ |\
C) As an economy produces a greater variety of goods, the cost
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of each good increases.
|\ |\ |\
D) When consumers do not want what producers make, increased
|\ |\ |\ |\ |\ |\ |\ |\ |\
opportunity for trade is missed.
|\ |\ |\ |\ |\
To produce more of one good, the economy gives up more and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
more of other goods. |\ |\ |\
How would a production possibility frontier be drawn for an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economy that produces two goods with homogeneous resources?
|\ |\ |\ |\ |\ |\ |\
A) As a constant slope, downward from left to right
|\ |\ |\ |\ |\ |\ |\ |\ |\
B) As a ray out of the origin, with a constant slope
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
C) As a semicircle centered on the origin, sloping downward from
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
