WGU D089 Principles of Economics TESTS/ (Top 2024/2025 EXAM REVIEW PAPERS / GRADED A+/ 100% Accurate)

WGU D089 Principles of Economics TESTS Which type of economy is characterized by a government that plans and controls all economic activity? - Command Correct! A command economy is a centralized economic system in which all economic decisions are made by the nation's government. What is an example of a normative economic statement? -Marginal tax rates should be lowered on high-income individuals. Correct! A marginal tax rate is the amount of money an individual pays in taxes on each additional dollar earned. This statement uses the word "should", which makes it a value judgment or opinion and a normative statement. Which characteristic is associated with natural resources from a business perspective? -They exist without human effort. Correct! Natural resources are found in nature without any human effort. How can the available supply of natural resources be increased? -Discovering new ways to extract resources Correct! The discovery of different ways to extract natural resources can make them more available. A ski resort sells tickets online at $70 per ticket. The resort is not selling many tickets, so it offers a twofor-one opportunity. Which economic principle is being used? -People respond to incentives. Correct! The incentive of a sale or coupon changed the cost from $70 to $35, making the ski trip more affordable and desirable. This incentive is what likely changed buyers' behaviors. What are the characteristics of the production possibility frontier graph? -Trade-offs in choices and downward sloping Correct! The graph of the production possibility frontier reflects trade-offs in choices and is downward sloping. How is scarcity represented on the production possibility frontier? -By there being attainable and unattainable points Correct! The production possibility frontier depicts the impact of scarcity by providing a clear mark between the set of attainable and unattainable points. The government imposes new safety regulations on the production of gas stoves. What will happen in the market for gas stoves? -Supply decreases. Correct! New government regulations on producers will make it more expensive to produce gas stoves and will decrease supply. The price of steel has increased by 5%, which leads to an increase in quantity supplied by 8%. Which outcome can be concluded from the demand and supply of steel? -The supply of steel is elastic. Correct! Because the quantity supplied increased by more than 5%, it is reasonable to conclude that the supply of steel is elastic. An individual wants to sell a car that frequently requires costly repairs. Although the car performs worse and requires more repairs than similar products, the seller hopes to get a price equal to better performing cars since the buyers will not know about the problems. Why is this seller able to charge a price equal to other sellers? -Asymmetric information Correct! The seller has more information relevant to the transaction about the car than the buyer does. Which market failure is overcome by a money-back guarantee strategy using mail-order catalogs? - Imperfect information Correct! A money-back guarantee helps instill confidence in the buyer about the quality of the product by refunding purchase price if the buyer is dis