WGU Economics D089 PA Questions

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WGU D089 PA #1

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Pre-Assessment: Introduction to So...

60 terms swestph86Preview WGU - 263 term Ma 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
• Why to produce it
• How to produce it
• When to produce it

What to produce

• multiple choice options

A newspaper is trying to help citizens understand economic principles. Which misconception should the article address?

• Consistent rising prices often results in inflation of

goods and services

• Printing too much money causes the price of goods to

increase.

• Increasing the money supply raises the standard of

living for consumers in the long run.

• Inflation decreases the value of money and makes

goods more expensive.Increasing the money supply raises the standard of living for consumers in the long run

• multiple choice options

Which scenario covers a topic included in microeconomics?

• As a result of a hard freeze, the price of cherries

increases.

• An economist compares the gross domestic product

between the United States and China.

• The government changes the tax policy to boost

economic growth in the United States.

• The Federal Reserve responds to an increase in

inflation by changing the interest rate.As a result of a hard freeze, the price of cherries increases.

• multiple choice options

Which shows the flow of payments between house holds and firms?

• Externalities in production
• Value-added production
• The Circular Flow Model
• The production possibilities model

The Circular Flow Model

• multiple choice options

What accurately characterizes capital?

• It is in the form of cash.
• It is reliant on a natural resource.
• It must be in the form of physical objects.
• It can be in the form of intellectual discoveries.

It can be in the form of intellectual discoveries.

• multiple choice options

Why is the circular flow model used?

• To describe how factors of production affect growth

and decline

• To illustrate how capitalism and socialism differ as an

economic form

• To describe the interaction of businesses and

households in markets

• To illustrate primarily the use of labor and natural

resources in an economy To describe the interaction of businesses and households in markets

• multiple choice options

What is a result of increasing opportunity costs?

• To consume more of one good, a consumer becomes

more and more efficient.

• To produce more of one good, the economy gives up

more and more of other goods.

• As an economy produces a greater variety of goods,

the cost of each good increases.

• When consumers do not want what producers make,

increased opportunity for trade is missed.To produce more of one good, the economy gives up more and more of other goods.

• multiple choice options

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
• As a ray out of the origin, with a constant slope
• As a semicircle centered on the origin, sloping

downward from left to right

• As a limited line, downward from left to right, that does

not touch either axis As a constant slope, downward from left to right

• multiple choice options

A company is operating at a point inside its production possibility frontier.Which conclusion is accurate about this company?

• The economy of the company will grow too fast.
• The resources of the company are being inefficiently

utilized.

• The company's resources are being used in the most

efficient manner.

• The production possibilities frontier for the company

will shift outward.The resources of the company are being inefficiently utilized.

• multiple choice options

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.

• If production of Good A increases, then production of

Good B will increase.

• If production of Good A is constant, then production

of B will increase.

• If production of Good A is constant, then production

of B will decrease.If production of Good A increases, then production of Good B will decrease.

• multiple choice options

Which description accurately characterizes demand?

• Changes in buyers' expectations will shift the demand

curve, and changes in buyers' income will result in a movement along the curve.

• Changes in the price of a substitute good will shift the

demand curve, and changes in buyers' tastes and preferences will result in a movement along the curve.

• Changes in the number of buyers in a market will shift

the demand curve, and changes in the price of a complement good will result in a movement along the curve.

• 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.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.

• multiple choice options

Which statement is true about the law of demand, all else being equal?

• A rise in price will likely increase the quantity

demanded.

• A fall in price will likely increase the quantity

demanded.

• A fall in price will likely decrease the quantity

demanded.

• A rise in price will not have any impact on quantity

demanded.A fall in price will likely increase the quantity demanded.

• multiple choice options

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
• Demand curve
• Law of demand
• Demand factors

Demand schedule

• multiple choice options

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 start to buy hot cocoa mix to make in

their own homes.

• Consumers will increase hot cocoa purchases while

out at a coffee shop.

• Consumers will feel a rise in price, but it will not affect

the quantity demanded.

• Consumers will decrease hot cocoa purchases both to

make at home or while out.Consumers will decrease hot cocoa purchases both to make at home or while out.

• multiple choice options

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

• A shift to the left due to an increase in demand in

expectation of a shortage

• A downward shift along the demand curve in

expectation of a shortage

• A price decrease as sellers understand that people

need these survival items A shift to the right due to an increase in demand in expectation of a shortage

• multiple choice options