WGU D089: Module 1

WGU D089: Module 1

Leave the first rating Students also studied Terms in this set (103) Western Governors UniversityD 089 Save D089 - Module 1 Teacher 37 terms WGU_Econ_CI_Team Preview

WGU D089 PA #1

70 terms Tracie_Neville8 Preview pre assessment d089 70 terms Loveysbg21610 Preview WGU D 46 terms vmo Practice questions for this set Learn1 / 7Study using Learn Increase the total quantity of labor by either increasing number of people available or increasing the average number of hours of work per time period. 2nd way to increase the amount of human capital possessed by workers.What are the three fundamental questions every economy must answer? Give an example of a "What" question.What to produce, how it will be produced, and from whom the goods or services are produced. What to produce (Oil vs. Cattle), How to (Current vs. New technology), From who to produce Choose an answer 12 ways to decrease labor22 methods to reduce human capital 32 ways to increase labor42 strategies to improve productivity Don't know?

What do economists mean when they say that people "think at the margin"?Thinking about the next step or an additional action means for a person.According to the 10 Principles of Economics, what determines a nation's standard of living?

Principle 8: Nations ability to produce goods and services.

Using the 10 Principles of Economics, explain why trade is beneficial?

Principle 5: Trade leaves everyone in a better position. Allows people to

concentrate on what they do best and exchange their ability with others.How does printing money impact prices?Printing to much money can cause prices to rise which causes inflation.What are the differences between the Traditional and the Market economy?Identify two disadvantages of a Command economy?Explain one of the advantages of the Mixed economy?How are macroeconomics and microeconomics different?Give an example of a normative statement.Identify the payment that goes to each of the four factors of production What doe the Circular flow diagram depict?EconomicsStudy of how humans make decisions in the face of scarcity.Factors of productionDescribes the inputs used in the production of goods or services to make an economic profit.MacroeconomicsBranch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. Large economic think national or global MicroeconomicsBranch 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. think small like people and businesses.ScarcityBasic economic problems, the gap between limited, scarce, resources, and theoretically limitless wants.What to Produce:Using the economy's scarce resources to produce one thing requires giving up another. Every society must decide what it will produce with its scarce resources.opportunity costThe next best alternative that is given up when a choice is made.

How to Produce it:There are all sorts of choices to be made in determining how goods and services should be produced.From whom to produce it:If a good or service is produced, a decision must be made about who will get it.The decision if one person, or group or service.Principal 1Everyone faces tradeoffs- People must decide what they are willing to give up to get what they need or want, For example person wants a new car but will spend most of her check and will forgo other wants or needs.Principal 2The cost of Something is determined by what you give up to get it - Opportunity cost is the value of the next best alternative. Ex: Buying a new car and the person will give up other goods or services that would have been bought if she didn't purchase the car.Principal 3Rational people think at the margin- people make better decisions when they consider if the additional benefit, they gain from one more unit is greater than the additional cost of that extra unit of a good or service.Principal 4People respond to incentives- Most decisions are based on costs Vs. benefits.Principle 5trade can make everyone better off, allows people to concentrate on what they do best and exchange their ability with others to supplement their own needs Principle 6Markets are a sound method of organizing economic activity- Principle 7Governments can sometimes improve market outcomes. This is an exception to rule 6.Principle 8Standard of living for a nation is determined by its ability to produce goods and services. Relationship between productivity and living standards.Principle 9Printing to much paper money causes prices to rise, causes inflation.Principle 10Society faces a short-run trade-off between inflation and unemployment.Ten Principles of Economics What to produce?A property owner has 500 acres of flat land and has been approached by two different businesses. One business want to drill for oil and the other wants to raise cattle How to produce it?A well-established company has been producing goods and wants to create a new line of production. The company needs to decide whether it should use a current factory or find a new location.

For whom to Produce?TO address environmental concerns, Congress is considering a bill that would increase the price of electricity generated by coal. Increasing the price of electricity creates a problem for low-income households.Principle 4 of Economics-People respond to incentives Sales manager offers higher commission for product not selling.Principle 5: Trade can leave everyone in a better positon A farmer is really good at growing corn and exchanges the corn for meant and supplies

Principle 6: Markets are a sound method of organization

economic activity Multiple producers and consumers exchange goods and services

Principle 7: Governments sometimes have the ability to

better market outcomes Companies face regulations when they create a monopoly in their industry.Consequence of government printing more money Decrease unemployment Economic Systemrefer to how an economy distributes scare resources.Four types of ecconomiesTraditional, Command, Market, Mixed Traditional EconomySystem where individuals make decisions based on traditions, beliefs and customs.command economyCentralized: A system where the government makes all the decisions. Think North Korea market economyDecentralized: System where businesses make decisions based on consumer demand mixed economySystem where businesses make decisions based on consumer demand, the government makes decisions in terms of regulations, consumer safety, and the environment.Differences between the Traditional and Market Economy Traditional is based on hunting, fishing, gathering, and agriculture they barter and trade goods and services in place of currency, are centered around tribes or families, exist in a hunter-gather and nomadic society, and produce what is needed. Market is decentralized, production is owned and operated by private individuals or groups, goods and services are supplied on demand, economic decisions are determined by market forces, and people and businesses have the right to commercialize property freely.Traditional Economic SystemEconomic system in which decisions are based on customs and centered on family

• key characteristics of a Traditional EconomyCentered around families and tribes, exists in a hunter-gather and nomadic

society, trade is heavily dependent on bartering rather than money, produces what is needed, and eventually changes from purely trad to the use of some type of currency