WGU D089 CERTIFICATION SCRIPT 2026
QUESTIONS WITH SOLUTIONS GRADED A+
◍ How do firms in a perfectly competitive market maximize profits when
facing perfectly elastic demand for their products?A) Firms choose how
much to produce.B) Firms choose their product prices.C) Firms change
short-term use of fixed inputs.D) Firms choose to advertise..
Answer: Firms choose how much to produce.
◍ Which economic policy is associated with restraining trade between
countries?A) Bretton WoodsB) Comparative advantageC) MonetaryD)
Protectionism.
Answer: Protectionism
◍ Why do markets with excess demand move toward equilibrium?A) Excess
demand produces excess supply over time.B) Excess demand declines as
prices fall.C) Consumers are willing to pay higher prices, and firms will
seek higher profits.D) New market entrants will leave the industry..
Answer: Consumers are willing to pay higher prices, and firms will seek
higher profits.
◍ How are Positive and Normative economics different from each other?.
Answer: Positive economics clearly states and economic issue, and
normative economics provides the value-based solution for the issue.
◍ What does the LRAC (Long run cost curve) show?.
Answer: The lowest possible average cost of production.
◍ A company is operating at a point inside its production possibility
frontier.Which conclusion is accurate about this company?A) The economy
of the company will grow too fast.B) The resources of the company are
being inefficiently utilized.C) The company's resources are being used in the
most efficient manner.D) The production possibilities frontier for the
, company will shift outward..
Answer: The resources of the company are being inefficiently utilized.
◍ What does a fall in the price of a good almost always cause?.
Answer: An increase in the quantity demanded
◍ In the short run, what happens to fixed costs when a firm increases
production?.
Answer: The fixed costs can be allocated over more output, and the per-unit
fixed cost decreases
◍ A country is experiencing an inflationary gap. Which type of fiscal policy
should the government undertake?A) ContractionaryB) ExpansionaryC)
NeutralD) Protectionist.
Answer: Contractionary
◍ A country produces two goods (A and B) and currently operates on the
bowed out production possibilities frontier. What is the relationship between
the productions of Good A and Good B?A) If production of Good A
increases, then production of Good B will decrease.B) If production of Good
A increases, then production of Good B will increase.C) If production of
Good A is constant, then production of B will increase.D) If production of
Good A is constant, then production of B will decrease..
Answer: If production of Good A increases, then production of Good B will
decrease.
◍ How does market competition provide incentives for innovation?A) Firms
can earn higher profits from new products.B) New ideas cannot be easily
copied from competitors.C) Research and development investment is
minimal.D) Technology increases barriers to entry for firms..
Answer: Firms can earn higher profits from new products.
◍ Why does a price ceiling cause market failure?A) It reduces the number of
exchanges that take place without any shifts in the curve.B) It reduces the
quantity demanded by consumers without any shifts in the curve.C) It
increases the cost to an amount consumers cannot afford. D) It increases
, exchanges to an allocative efficient quantity..
Answer: It reduces the number of exchanges that take place without any
shifts in the curve.
◍ Which description accurately characterizes demand?A) Changes in buyers'
expectations will shift the demand curve, and changes in buyers' income will
result in a movement along the curve.B) Changes in the price of a substitute
good will shift the demand curve, and changes in buyers' tastes and
preferences will result in a movement along the curve.C) Changes in the
number of buyers in a market will shift the demand curve, and changes in
the price of a complement good will result in a movement along the
curve.D) Changes in income will shift the demand curve, and changes in the
market price of the good will result in a movement along the curve..
Answer: Changes in income will shift the demand curve, and changes in the
market price of the good will result in a movement along the curve.
◍ Which early tool was used to measure the degree of monopoly power in an
industry?A) Concentration ratioB) AcquisitionC) Herfindahl-Hirschman
Index D) Cartel.
Answer: Concentration ratio
◍ What is an outcome of a perfectly competitive market?A) Firms will
experience zero long-run economic profits.B) Firms will experience positive
long-run economic profits.C) It is the least productively efficient in the long
run.D) It is the least allocatively efficient in the long run..
Answer: Firms will experience zero long-run economic profits.
◍ How is more money created by loans that are made to individuals or firms?.
Answer: The money is likely deposited in other accounts
◍ How do average total costs typically appear on a graph?.
Answer: The are usually U-shaped
◍ What does an decrease in the aggregate demand (AD) mean?.
Answer: At least one of the GDP components decreased so a lesser amount
of total spending would occur at every price level
, ◍ What is an approximate indicator of a society's standard of living?.
Answer: GDP
◍ A government wants to incentivize domestic producers to grow and sell
more organic vegetables locally rather than selling them internationally. The
government plans to enact a flat tax on all domestic organic produce shipped
outside of the country.Which type of tariff is the government enacting?A)
ExportB) CompoundC) ProtectiveD) Ad valorem.
Answer: Export
◍ When will a monopolist choose to produce one more unit of a product?A)
When marginal revenue exceeds marginal costB) When marginal cost
exceeds marginal revenueC) If the total revenue exceeds total costD) If the
total cost exceeds total revenue.
Answer: When marginal revenue exceeds marginal cost
◍ How is the Herfindahl-Hirschman Index (HHI) caclulated?.
Answer: by summing the squares of the market share of each firm in the
industry.
◍ An individual firm is considering entering a perfectly competitive market.
The average total cost of the firm is lower than the market price.What will
result if the firm enters the market?A) The firm will enter the market and
make a positive economic profit.B) The firm will enter the market and make
a negative economic profit.C) The firm will not enter the market because it
will be very difficult to overcome entry barriers.D) The firm will not enter
the market because it would be a price taker..
Answer: The firm will enter the market and make a positive economic profit.
◍ How is the foreign price effect described?.
Answer: If prices in the United States rise while remaining fixed in other
countries, then goods in the Unites States will be relatively more expensive
compared to goods in the rest of the world, which tends to reduce exports
and increase imports.
◍ What type of quota allows a quantity of a good to be imported under a lower
QUESTIONS WITH SOLUTIONS GRADED A+
◍ How do firms in a perfectly competitive market maximize profits when
facing perfectly elastic demand for their products?A) Firms choose how
much to produce.B) Firms choose their product prices.C) Firms change
short-term use of fixed inputs.D) Firms choose to advertise..
Answer: Firms choose how much to produce.
◍ Which economic policy is associated with restraining trade between
countries?A) Bretton WoodsB) Comparative advantageC) MonetaryD)
Protectionism.
Answer: Protectionism
◍ Why do markets with excess demand move toward equilibrium?A) Excess
demand produces excess supply over time.B) Excess demand declines as
prices fall.C) Consumers are willing to pay higher prices, and firms will
seek higher profits.D) New market entrants will leave the industry..
Answer: Consumers are willing to pay higher prices, and firms will seek
higher profits.
◍ How are Positive and Normative economics different from each other?.
Answer: Positive economics clearly states and economic issue, and
normative economics provides the value-based solution for the issue.
◍ What does the LRAC (Long run cost curve) show?.
Answer: The lowest possible average cost of production.
◍ A company is operating at a point inside its production possibility
frontier.Which conclusion is accurate about this company?A) The economy
of the company will grow too fast.B) The resources of the company are
being inefficiently utilized.C) The company's resources are being used in the
most efficient manner.D) The production possibilities frontier for the
, company will shift outward..
Answer: The resources of the company are being inefficiently utilized.
◍ What does a fall in the price of a good almost always cause?.
Answer: An increase in the quantity demanded
◍ In the short run, what happens to fixed costs when a firm increases
production?.
Answer: The fixed costs can be allocated over more output, and the per-unit
fixed cost decreases
◍ A country is experiencing an inflationary gap. Which type of fiscal policy
should the government undertake?A) ContractionaryB) ExpansionaryC)
NeutralD) Protectionist.
Answer: Contractionary
◍ A country produces two goods (A and B) and currently operates on the
bowed out production possibilities frontier. What is the relationship between
the productions of Good A and Good B?A) If production of Good A
increases, then production of Good B will decrease.B) If production of Good
A increases, then production of Good B will increase.C) If production of
Good A is constant, then production of B will increase.D) If production of
Good A is constant, then production of B will decrease..
Answer: If production of Good A increases, then production of Good B will
decrease.
◍ How does market competition provide incentives for innovation?A) Firms
can earn higher profits from new products.B) New ideas cannot be easily
copied from competitors.C) Research and development investment is
minimal.D) Technology increases barriers to entry for firms..
Answer: Firms can earn higher profits from new products.
◍ Why does a price ceiling cause market failure?A) It reduces the number of
exchanges that take place without any shifts in the curve.B) It reduces the
quantity demanded by consumers without any shifts in the curve.C) It
increases the cost to an amount consumers cannot afford. D) It increases
, exchanges to an allocative efficient quantity..
Answer: It reduces the number of exchanges that take place without any
shifts in the curve.
◍ Which description accurately characterizes demand?A) Changes in buyers'
expectations will shift the demand curve, and changes in buyers' income will
result in a movement along the curve.B) Changes in the price of a substitute
good will shift the demand curve, and changes in buyers' tastes and
preferences will result in a movement along the curve.C) Changes in the
number of buyers in a market will shift the demand curve, and changes in
the price of a complement good will result in a movement along the
curve.D) Changes in income will shift the demand curve, and changes in the
market price of the good will result in a movement along the curve..
Answer: Changes in income will shift the demand curve, and changes in the
market price of the good will result in a movement along the curve.
◍ Which early tool was used to measure the degree of monopoly power in an
industry?A) Concentration ratioB) AcquisitionC) Herfindahl-Hirschman
Index D) Cartel.
Answer: Concentration ratio
◍ What is an outcome of a perfectly competitive market?A) Firms will
experience zero long-run economic profits.B) Firms will experience positive
long-run economic profits.C) It is the least productively efficient in the long
run.D) It is the least allocatively efficient in the long run..
Answer: Firms will experience zero long-run economic profits.
◍ How is more money created by loans that are made to individuals or firms?.
Answer: The money is likely deposited in other accounts
◍ How do average total costs typically appear on a graph?.
Answer: The are usually U-shaped
◍ What does an decrease in the aggregate demand (AD) mean?.
Answer: At least one of the GDP components decreased so a lesser amount
of total spending would occur at every price level
, ◍ What is an approximate indicator of a society's standard of living?.
Answer: GDP
◍ A government wants to incentivize domestic producers to grow and sell
more organic vegetables locally rather than selling them internationally. The
government plans to enact a flat tax on all domestic organic produce shipped
outside of the country.Which type of tariff is the government enacting?A)
ExportB) CompoundC) ProtectiveD) Ad valorem.
Answer: Export
◍ When will a monopolist choose to produce one more unit of a product?A)
When marginal revenue exceeds marginal costB) When marginal cost
exceeds marginal revenueC) If the total revenue exceeds total costD) If the
total cost exceeds total revenue.
Answer: When marginal revenue exceeds marginal cost
◍ How is the Herfindahl-Hirschman Index (HHI) caclulated?.
Answer: by summing the squares of the market share of each firm in the
industry.
◍ An individual firm is considering entering a perfectly competitive market.
The average total cost of the firm is lower than the market price.What will
result if the firm enters the market?A) The firm will enter the market and
make a positive economic profit.B) The firm will enter the market and make
a negative economic profit.C) The firm will not enter the market because it
will be very difficult to overcome entry barriers.D) The firm will not enter
the market because it would be a price taker..
Answer: The firm will enter the market and make a positive economic profit.
◍ How is the foreign price effect described?.
Answer: If prices in the United States rise while remaining fixed in other
countries, then goods in the Unites States will be relatively more expensive
compared to goods in the rest of the world, which tends to reduce exports
and increase imports.
◍ What type of quota allows a quantity of a good to be imported under a lower
