WGU D089 PA #1

WGU D089 PA #1

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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 pre assessment d089 70 terms Loveysbg21610 Preview Princip 32 terms wtf Which 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 repairs, 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 principle 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 hard freeze, the price of cherries increase 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 the result of increasing opportunity costs? to produce more of one good, the economy gives up more and more of other goods 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 insides its production possibility frontier.Which conclusion is accurate about this company?Resources of the company are being inefficiently utilized A county produces two goods (A and B) and currently operates on the bowed out production possibilities frontier.What is the relationship between 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:

Assume that this farm operates at option B:

What happens to the production of apples and oranges if the farm decides to move to option D?Production of apples will decrease by 50 pounds and production of oranges will decrease by 45 pounds.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

$0.50 20

$0.75 15

$1.00 10

$1.25 5

$1.50 0

The prize 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 What description accurately characterizes demand? Changes in income will shift demand curve, and changes in the market price of good will result in 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 coca from South American 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

When a resident heard an expected tornado, the individual rant 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 increases by 7%, the absolute value of price elasticity of demand for this product is 3.8 What is the percent of change in quantity demanded?

26.6?crease The average price of eggs increases from $1.10 to $1.30, in response the quantity supplied increase 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 a market failure? It reduces the number of exchanges that take place without any shift 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 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 electrons. To encourage buyers to purchase the electronics products, the seller offers customers the opportunity to pay a fee and have any required or replacement done for free within the next two years.Which concept is this seller using?Service Contract How does the 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.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

Why is a firm's total cost 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 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 cost Which effect is observed along the total cost curve as it becomes steeper?Diminishing marginal returns Which situation occurs for a form in the long run? The quantities of all inputs are variable The market demand for high-end eyeglass frames is currently at 5,000 per month, and identical firms operation 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 not changed, their market demand has decreases 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 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 An individual firm is considering entering a perfectly competitive market. The average cost of the firm is lower than the market prices.What will results if the firm enters the market?The firm will enter the market and make a positive economic profit When will a monopolist choose to produce one more unit of a product?When marginal revenue exceeds marginal cost Which statement accurately describes a concentration ratio for an industry?The combined profits of the most profitable firms