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pre assessment d089
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Students also studied Terms in this set (70) Western Governors UniversityD 196 Save WGU - D089 Principles of Economic...263 terms Marcel_GilesPreview D089 - Module 1 Teacher 37 terms WGU_Econ_CI_Team Preview D089 Principles of Economics 250 terms jordan_hammond1 Preview WGU D 70 terms Trac Which set of questions is answered when a society decides how to distribute its scarce resources?What, how, and for whom to produce goods and services
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?What to produce
A newspaper is trying to help citizens understand economic principles. Which misconception should the article address?Increasing the money supply raises the standard of living for consumers in the long run.
Which scenario covers a topic included in microeconomics?As a result of a hard freeze, the price of cherries increases.
What accurately characterizes capital?It can be in the form of intellectual discoveries.
Why is the circular flow model used?To describe the interaction of businesses and households in markets
What is a result of increasing opportunity costs? To produce more of one good, the economy gives up more and more of other goods.
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How would a production possibility frontier be drawn for an economy that produces two goods with homogeneous resources?As a constant slope, downward from left to right
A company is operating at a point inside its production possibility frontier.The resources of the company are being inefficiently utilized.
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?If production of Good A increases, then production of Good B will decrease.
A local farm grows apples and oranges. Production possibilities for this farm are provided in the following
figure:
Production of apples will increase by 50 pounds, and production of oranges will increase by 15 pounds.
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A group of roommates decides to buy pizza together.The table below shows the quantity of pizza demanded
at different price levels:
Demand for Pizza After a Drop in Price Price of Pizza Quantity Demanded (per slice) (in slices)
$0.50- 20
$0.75- 15
$1.00-10
$1.25- 5
$1.50-0
The prize of pizza was originally $1.25 per slice, but it is now on sale for $0.75 per slice. How will the price change affect the quantity of pizza slices demanded?The quantity demanded of pizza slices will increase by 10 slices.
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Which description accurately characterizes demand? 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 statement is true about the law of demand, all else being equal?A fall in price will likely increase the quantity demanded.
What is the name of a table depicting the relationship between the prices of a product and the quantities that consumers are willing to buy at those prices?Demand schedule
Which outcome is expected regarding the hot cocoa industry when the cost of cocoa from South America increases in price, making it more expensive to U.S.businesses?Consumers will decrease hot cocoa purchases both to make at home or while out.
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When a resident heard of an expected tornado, the individual ran to the store to stock up on survival items including bread, peanut butter, batteries, and water.Which statement is likely to occur on the demand graph in response to this situation?A shift to the right due to an increase in demand in expectation of a shortage
Why do markets with excess demand move toward equilibrium?Consumers are willing to pay higher prices, and firms will seek higher profits.
Which statement describes how higher input costs affect equilibrium in the market for a good?They reduce supply, causing prices to rise.
The market price of a product increased by 7%. The absolute value of the price elasticity of demand for this product is 3.8.
26.6?crease
The average price of eggs increases from $1.10 to $1.30.In response, the quantity supplied increases from 220 to 260 eggs. The elasticity of supply is equal to 1.Which term describes the price elasticity of this supply?Unit elastic
Why does a price ceiling cause market failure?It reduces the number of exchanges that take place without any shifts in the curve.
Where does a price floor need to be set to create a surplus?Above the market equilibrium price
Which type of law causes a price floor?Minimum wage
Which outcome is caused by adverse selection in the used car market?Only poorly maintained cars being available for sale
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?Service contract
How does market competition provide incentives for innovation?Firms can earn higher profits from new products.
How should a government overcome the inefficiencies created by negative externalities?Place a $2 tax on each item produced that contains harmful chemicals
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Why is a firm's total costs in the long run always as low or lower than in the short run?In the long run, a firm can alter its use of all factors of production.
Which result occurs when adding additional variable inputs according to the law of diminishing marginal returns?Smaller increases in output from each unit of input
What are firms trying to accomplish when they choose particular combinations of inputs such as land, labor, and capital?To maximize the difference between total revenue and total costs
Which effect is observed along the total cost curve as it becomes steeper?Diminishing marginal returns
Which situation occurs for a firm in the long run? The quantities of all inputs are variable.
The market demand for high-end eyeglass frames is currently at 5,000 units per month, and identical firms operating in this market are facing constant returns to scale in the product range of 500 to 1,000 units per month. There are currently 10 firms supplying frames to the market. While prices of frames have not changed, their market demand has decreased to 4,500 units per month. Which change should be expected in the number of firms supplying frames to this market in the long run?A decline in the number of firms; one to five firms will exit the market.
Which type of market is characterized by firms with no market power for any individual firm?Perfect competition
Generic drugs start appearing after pharmaceutical firms' patents expire. These generic drugs have the same formulation as name-brand drugs, but they are priced below name-brand medications. Producing generic drugs requires a significant capital investment to establish a modern manufacturing facility and established distribution networks.What is the market structure for these drugs?Oligopoly
How do firms in a perfectly competitive market maximize profits when facing perfectly elastic demand for their products?Firms choose how much to produce.
What is an outcome of a perfectly competitive market? Firms will experience zero long-run economic profits.
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