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WGU - D089 PRINCIPLES OF ECONOMICS
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Economics Ans: The study of how humans make decisions in the face of
scarcity.
Factors of Production Ans: Describes theninputs used in the production
of goods or services to make an economic profit.
Macroeconomics Ans: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
Microeconomics Ans: 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 Ans: The basic economic problem, the gap between limited,
scarce, resources and theoretically limitless wants
Opportunity Cost Ans: The next best alternative that is given up when a
choice is made.
Think at the Margin Ans: Thinking about what the next step or an
additional action means for a person.
Marginal Benefit Ans: 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 ) Ans: Everyone faces tradeoffs
2nd (Principles of Economics ) Ans: The cost of something is determined
by what you give up to get it.
3rd (Principles of Economics ) Ans: Rational people think at the margin.
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4th (Principles of Economics ) Ans: People respond to incentives.
5th (Principles of Economics ) Ans: Trade can benefit everyone.
6th (Principles of Economics ) Ans: Markets are a sound method of
organizing economic activity.
7th (Principles of Economics ) Ans: Government may be able to improve
market outcomes.
8th (Principles of Economics ) Ans: A nation's standard of living depends
on its ability to produce.
9th (Principles of Economics ) Ans: Printing too much money causes
prices to rise.
10th (Principles of Economics ) Ans: There is short-run tradeoff between
inflation and unemployment.
Economic Systems Ans: A system of the production, resource allocation,
and distribution of goods and services within a society or give geographic
area.
Traditional Economy Ans: A economic system that relies on customs,
history. and time-honored beliefs. Guides economic decisions such as
production and distribution.
Command Economy Ans: An economic system in which production,
investment, prices, and incomes are determined centrally by a
government.
(Centralized)
Market Economy Ans: 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)
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Mixed Economy Ans: 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 Ans: The study of economics concerned with what is
and what will happen if a course of action is taken or not taken.
Normative Economics Ans: The study of economics with what is and
what will happen if a course of action is taken or not taken.
Economic Models Ans: A simplified version of reality that allows people
to observe, understand and make predictions about economic behavior.
Economic Indicators Ans: A statistic about an economic activity.
Circular Flow Model Ans: An economic model that shows the flow of
money and goods through the economy. The most common form of this
model shows the circular flow of income between the household sector
and the business sector.
Human Capital Ans: The accumulated skills and education of workers.
Research and Development Ans: Term commonly used to describe the
activities undertaken by firms and other entities such as individual
entrepreneurs to create new or improved products and processes.
Partnership Ans: A legal form of business operation between two or
more individuals who share management and profits.
Merger Ans: Combining two companies into a single larger company
Factors of Production Ans: Describes the inputs used in the production
of goods or services to make an economic profit.
Financial Capital Ans: Most commonly refers to assets needed by a
company to provide goods or services as measured in terms of money
value.
Profit (Q/A) Ans: What is the payment of production for
entrepreneurship?
WGU - D089 PRINCIPLES OF ECONOMICS
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Economics Ans: The study of how humans make decisions in the face of
scarcity.
Factors of Production Ans: Describes theninputs used in the production
of goods or services to make an economic profit.
Macroeconomics Ans: A branch of economic dealing with the
performance, structure, behavior and decision making of an economy as
a whole.
Microeconomics Ans: 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 Ans: The basic economic problem, the gap between limited,
scarce, resources and theoretically limitless wants
Opportunity Cost Ans: The next best alternative that is given up when a
choice is made.
Think at the Margin Ans: Thinking about what the next step or an
additional action means for a person.
Marginal Benefit Ans: 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 ) Ans: Everyone faces tradeoffs
2nd (Principles of Economics ) Ans: The cost of something is determined
by what you give up to get it.
3rd (Principles of Economics ) Ans: Rational people think at the margin.
, Page | 2
4th (Principles of Economics ) Ans: People respond to incentives.
5th (Principles of Economics ) Ans: Trade can benefit everyone.
6th (Principles of Economics ) Ans: Markets are a sound method of
organizing economic activity.
7th (Principles of Economics ) Ans: Government may be able to improve
market outcomes.
8th (Principles of Economics ) Ans: A nation's standard of living depends
on its ability to produce.
9th (Principles of Economics ) Ans: Printing too much money causes
prices to rise.
10th (Principles of Economics ) Ans: There is short-run tradeoff between
inflation and unemployment.
Economic Systems Ans: A system of the production, resource allocation,
and distribution of goods and services within a society or give geographic
area.
Traditional Economy Ans: A economic system that relies on customs,
history. and time-honored beliefs. Guides economic decisions such as
production and distribution.
Command Economy Ans: An economic system in which production,
investment, prices, and incomes are determined centrally by a
government.
(Centralized)
Market Economy Ans: 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)
, Page | 3
Mixed Economy Ans: 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 Ans: The study of economics concerned with what is
and what will happen if a course of action is taken or not taken.
Normative Economics Ans: The study of economics with what is and
what will happen if a course of action is taken or not taken.
Economic Models Ans: A simplified version of reality that allows people
to observe, understand and make predictions about economic behavior.
Economic Indicators Ans: A statistic about an economic activity.
Circular Flow Model Ans: An economic model that shows the flow of
money and goods through the economy. The most common form of this
model shows the circular flow of income between the household sector
and the business sector.
Human Capital Ans: The accumulated skills and education of workers.
Research and Development Ans: Term commonly used to describe the
activities undertaken by firms and other entities such as individual
entrepreneurs to create new or improved products and processes.
Partnership Ans: A legal form of business operation between two or
more individuals who share management and profits.
Merger Ans: Combining two companies into a single larger company
Factors of Production Ans: Describes the inputs used in the production
of goods or services to make an economic profit.
Financial Capital Ans: Most commonly refers to assets needed by a
company to provide goods or services as measured in terms of money
value.
Profit (Q/A) Ans: What is the payment of production for
entrepreneurship?
