WGU C201 | BUSINESS ACUMEN |
CHAPTER 3 QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS 100% CORRECT!!!
Fundamentals of Economics
Economics A branch of social science dedicated to examining the decisions
made by individuals, households, and governing bodies regarding the
distribution of limited resources. ✔️✔️
Microeconomics The specific area of economic study that focuses on small-
scale units, investigating the behaviors and financial choices of individual
consumers, specific families, or single business entities. ✔️✔️
Demand The combined desire and financial capacity of consumers to acquire
products or services across a spectrum of various price points. ✔️✔️
Supply The readiness and capability of producers or vendors to offer goods and
services to the market at various price levels. ✔️✔️
Factors driving demand -ANSWER ✔️✔️A demand curve is a graph of the
amount of a product buyers will purchase at different prices under a given set of
conditions. Generally, as price go up, demand goes down and vice versa.
However, the entire curve can shift to the right or left depending on changed
conditions. These changes reflect factors such as customer preferences, number
of buyers, buyer's incomes, prices of substitute goods, prices of complementary
goods, and how optimistic or pessimistic future expectations become.
Factors driving supply -ANSWER ✔️✔️A supply curve graphically shows the
relationship between different prices and the quantities sellers will offer for sale,
regardless of demand. Generally, as prices rise, the quantity sellers are willing to
, produce increases, and vice versa. The entire curve can also shift right or left
depending on such factors as costs or availability of inputs (factors of
production), costs of technologies, taxes, and the number of suppliers.
How demand and supply interact -ANSWER ✔️✔️The equilibrium price
identifies the prevailing market price and is found at the intersection of the
supply and demand curves.
Capitalism and competition -ANSWER ✔️✔️Capitalism (also called market
economy or the private enterprise system) depends on competition. In this kind
of economic system, different industries exhibit different competitive market
structures. The four market structures are pure competition, monopolistic
competition, oligopoly, and monopoly.
Planned economies: communism and socialism -ANSWER ✔️✔️In a planned
economy, the government's control determines business ownership, profits, and
resource allocation to accomplish government goals rather than goals of
individuals. Under communism, all property is shared equally by the people of a
community under the direction of a strong central government. Under socialism,
government owns and operates the major industries.
Mixed market economies -ANSWER ✔️✔️In practice, most countries implement
mixed market economies: economic systems that display characteristics of both
planned and market economies in varying degrees.
Flattening the business cycle -ANSWER ✔️✔️A nation's economy tends to flow
through various stages of a business cycle: prosperity, recession, depression, and
recovery. While the business cycle is normal, many economists believe that
society is capable of preventing future depressions.
CHAPTER 3 QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS 100% CORRECT!!!
Fundamentals of Economics
Economics A branch of social science dedicated to examining the decisions
made by individuals, households, and governing bodies regarding the
distribution of limited resources. ✔️✔️
Microeconomics The specific area of economic study that focuses on small-
scale units, investigating the behaviors and financial choices of individual
consumers, specific families, or single business entities. ✔️✔️
Demand The combined desire and financial capacity of consumers to acquire
products or services across a spectrum of various price points. ✔️✔️
Supply The readiness and capability of producers or vendors to offer goods and
services to the market at various price levels. ✔️✔️
Factors driving demand -ANSWER ✔️✔️A demand curve is a graph of the
amount of a product buyers will purchase at different prices under a given set of
conditions. Generally, as price go up, demand goes down and vice versa.
However, the entire curve can shift to the right or left depending on changed
conditions. These changes reflect factors such as customer preferences, number
of buyers, buyer's incomes, prices of substitute goods, prices of complementary
goods, and how optimistic or pessimistic future expectations become.
Factors driving supply -ANSWER ✔️✔️A supply curve graphically shows the
relationship between different prices and the quantities sellers will offer for sale,
regardless of demand. Generally, as prices rise, the quantity sellers are willing to
, produce increases, and vice versa. The entire curve can also shift right or left
depending on such factors as costs or availability of inputs (factors of
production), costs of technologies, taxes, and the number of suppliers.
How demand and supply interact -ANSWER ✔️✔️The equilibrium price
identifies the prevailing market price and is found at the intersection of the
supply and demand curves.
Capitalism and competition -ANSWER ✔️✔️Capitalism (also called market
economy or the private enterprise system) depends on competition. In this kind
of economic system, different industries exhibit different competitive market
structures. The four market structures are pure competition, monopolistic
competition, oligopoly, and monopoly.
Planned economies: communism and socialism -ANSWER ✔️✔️In a planned
economy, the government's control determines business ownership, profits, and
resource allocation to accomplish government goals rather than goals of
individuals. Under communism, all property is shared equally by the people of a
community under the direction of a strong central government. Under socialism,
government owns and operates the major industries.
Mixed market economies -ANSWER ✔️✔️In practice, most countries implement
mixed market economies: economic systems that display characteristics of both
planned and market economies in varying degrees.
Flattening the business cycle -ANSWER ✔️✔️A nation's economy tends to flow
through various stages of a business cycle: prosperity, recession, depression, and
recovery. While the business cycle is normal, many economists believe that
society is capable of preventing future depressions.
