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Principles of Economics Comprehensive Review
Guide for OA and Pre-assessment Prep – Questions
Compiled from Modules 1-10 | 2025 WGU D089 OA
Practice Test
What is economics? - ...ANSWER...✓✓ A social science
focused on the allocation of scarce resources to produce
goods and services for maximum satisfaction.
Who is known as the Father of Economics? -
...ANSWER...✓✓ Adam Smith, a Scottish economist from
the 17th century.
What is the 'Invisible Hand' principle in economics? -
...ANSWER...✓✓ The concept that individuals pursuing
their own self-interest can benefit the whole market.
What does 'Laissez-faire' mean in economic terms? -
...ANSWER...✓✓ The absence of governmental control
over business.
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What is the Division of Labor? - ...ANSWER...✓✓ The
specialization of individuals in specific parts of the
production process.
What is meant by 'Free trade'? - ...ANSWER...✓✓ Non-
governmental intervention in trading among nations, such
as no tariffs or quotas.
Define 'Free enterprise'. - ...ANSWER...✓✓ Non-
governmental intervention in the operation of commercial
enterprises.
What significant change occurred during the Industrial
Revolution? - ...ANSWER...✓✓ The introduction of
machines in factories in 18th century England.
What are the four sectors of the economy? -
...ANSWER...✓✓ Household, Business firm, Government,
and Rest of the World.
What is the role of the Household sector in the economy?
- ...ANSWER...✓✓ It acts as a consuming unit.
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What is the role of the Business firm sector? -
...ANSWER...✓✓ It acts as a producing unit.
How does the Government sector function in the
economy? - ...ANSWER...✓✓ It controls all other
economic activities, collects taxes, buys goods, and hires
labor.
What are the four factors of production? - ...ANSWER...✓✓
Land, Labor, Capital, and Entrepreneurship.
What is 'Opportunity cost'? - ...ANSWER...✓✓ The value of
the foregone alternative when a choice is made.
List the four economic activities of man. - ...ANSWER...✓✓
Production, Distribution, Exchange, and Consumption.
What is the goal of promoting economic efficiency? -
...ANSWER...✓✓ To produce more output using fewer
resources.
Principles of Economics Comprehensive Review
Guide for OA and Pre-assessment Prep – Questions
Compiled from Modules 1-10 | 2025 WGU D089 OA
Practice Test
What is economics? - ...ANSWER...✓✓ A social science
focused on the allocation of scarce resources to produce
goods and services for maximum satisfaction.
Who is known as the Father of Economics? -
...ANSWER...✓✓ Adam Smith, a Scottish economist from
the 17th century.
What is the 'Invisible Hand' principle in economics? -
...ANSWER...✓✓ The concept that individuals pursuing
their own self-interest can benefit the whole market.
What does 'Laissez-faire' mean in economic terms? -
...ANSWER...✓✓ The absence of governmental control
over business.
,2|Page
What is the Division of Labor? - ...ANSWER...✓✓ The
specialization of individuals in specific parts of the
production process.
What is meant by 'Free trade'? - ...ANSWER...✓✓ Non-
governmental intervention in trading among nations, such
as no tariffs or quotas.
Define 'Free enterprise'. - ...ANSWER...✓✓ Non-
governmental intervention in the operation of commercial
enterprises.
What significant change occurred during the Industrial
Revolution? - ...ANSWER...✓✓ The introduction of
machines in factories in 18th century England.
What are the four sectors of the economy? -
...ANSWER...✓✓ Household, Business firm, Government,
and Rest of the World.
What is the role of the Household sector in the economy?
- ...ANSWER...✓✓ It acts as a consuming unit.
, 3|Page
What is the role of the Business firm sector? -
...ANSWER...✓✓ It acts as a producing unit.
How does the Government sector function in the
economy? - ...ANSWER...✓✓ It controls all other
economic activities, collects taxes, buys goods, and hires
labor.
What are the four factors of production? - ...ANSWER...✓✓
Land, Labor, Capital, and Entrepreneurship.
What is 'Opportunity cost'? - ...ANSWER...✓✓ The value of
the foregone alternative when a choice is made.
List the four economic activities of man. - ...ANSWER...✓✓
Production, Distribution, Exchange, and Consumption.
What is the goal of promoting economic efficiency? -
...ANSWER...✓✓ To produce more output using fewer
resources.
