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D089 / D 089 Pre - Assessment (Latest Update 2025 / 2026) Principles of Economics | Questions and Answers | Grade A | 100% Correct (Verified Answers) - WGU
Question:
Why does a price ceiling cause market failure?
Answer:
It reduces the number of exchanges that take place without any shifts in the curve.
Question:
Where does a price floor need to be set to create a surplus?
Answer:
Above the market equilibrium
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Question:
What type of law causes a price floor?
Answer:
Minimum wage
Question:
Which outcome is caused by an adverse selection in the used car market?
Answer:
Only poorly maintained cars being available for sale
Question:
A local store sells products that have been imported from a country with a reputation for producing low quality electronics. To encourage buyers to purchase the electronic products, the seller offers customers the opportunity to pay a fee and have any required repairs or replacement done for free within the next two years.Which concept is this seller using?
Answer:
Service contract
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Question:
How does market competition provide incentives for innovation?
Answer:
Firms can earn higher profits from new products
Question:
How should a government overcome the inefficiencies created by negative externalities?
Answer:
Place a $2 tax on each item produced that contains harmful chemicals
Question:
Which result occurs when adding additional variable inputs according to the law of diminishing marginal returns?
Answer:
Smaller increases of output from each unit of input
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