D089 WGU Principles of Economics (Study Guide To Pass The OA) –Q/A Traditional Economy ✔️Ans - A system where individuals make decisions based on traditions, beliefs, and customs.Command Economy ✔️Ans - A system where the government makes all the decisions.Market Economy ✔️Ans - A system where businesses make decisions based on consumer demand. Innovation is encouraged and rewarded.Mixed Economy ✔️Ans - A system where businesses make decisions based on consumer demand, but the government makes decisions in terms of regulations, consumer safety, and environment.Positive Economics ✔️Ans - Focuses primarily on facts, and they can be tested.Normative Economics ✔️Ans - Opinions that express value or normative judgments about economic fairness.Production Possibilities Frontier (PPF) ✔️Ans - Shows the alternative combinations of two goods or services that an economy can produce with the given resources and technology when the resources are fully efficiently used at a given point in time. Slopes downward because it is showing an increase in the number of units of the product X. Points below the PPF are attainable.Production Possibilities Curve (PPC) ✔️Ans - Presents potential prospects to produce a pair of products. All points on the curve are attainable and efficient. This is when you are using your resources to the fullest.Homogeneous ✔️Ans - Consisting of parts all of the same kind.Heterogeneous ✔️Ans - A resource having two different forms or skills. 1 / 2
Law of Increasing Opportunity Costs ✔️Ans - When all resources are being used, an increase in the production of one good will lead to greater forgone production of another good.Demand Schedule ✔️Ans - A chart that shows the number of goods or services demanded at specific prices.Law of Demand ✔️Ans - The common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded while all other variables are held constant.Demand Curve ✔️Ans - Shows how much people will want at different prices. (Downwards Price, Increase Quantity)- Factors Affecting Demand That Make It Shift ✔️Ans - Tastes and Preferences, Price of Complements (Bread and Jam, Printer and Ink), Price of Substitutes, Income, Expectation (of future prices) (Inflation, News), Population (More people, Demand is higher) Supply Curve ✔️Ans - Shows how much sellers will supply at different prices. (Upwards Price, Increase Quantity) Law of Supply ✔️Ans - If all else is being constant and as price increases, the quantity supplied also increases and vice versa. There is a positive relationship between price and supply when all other things are held constant.Equilibrium Quantity (Qe) ✔️Ans - The quantity of a good or service bought at the equilibrium price. The equilibrium quantity is the quantity produced and bought where the supply and demand curves intersect.Price Elasticity ✔️Ans - Measures the responsiveness of quantity demanded or quantity supplied to a change in price in percentage terms.Price Elasticity of Demand ✔️Ans - The percentage change in price of that good or service.
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