WGU C201 | Business Acumen | Chapter 3 Questions and Answers Already Passed
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Course
WGU C201
Institution
WGU C201
Economics A social science that analyzes the choices people and governments make in
allocating scarce resources.
Microeconomics Study of small economics units, such as an individual consumers, families,
and businesses.
Demand The willingness and ability of buyers to purchase goods and services ...
WGU C201 | Business Acumen | Chapter
3 Questions and Answers Already
Passed
Economics ✔✔A social science that analyzes the choices people and governments make in
allocating scarce resources.
Microeconomics ✔✔Study of small economics units, such as an individual consumers, families,
and businesses.
Demand ✔✔The willingness and ability of buyers to purchase goods and services at different
prices.
Supply ✔✔The willingness and ability of sellers to provide goods and services for sale at different
prices.
Factors driving demand ✔✔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 ✔✔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 ✔✔The equilibrium price identifies the prevailing market price
and is found at the intersection of the supply and demand curves.
Capitalism and competition ✔✔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 ✔✔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 ✔✔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 ✔✔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.
Productivity and the nation's GDP ✔✔Increases in productivity, which is the relationship between
the goods and services produced and the inputs needed to produce them, generally leads to
economic growth. The measure of these goods and services on which productivity is calculated in
the Gross Domestic Product (GDP), defined as the sum of all goods and services produced within
a nation's boundaries in a given year.
Price-level changes ✔✔Price-level changes is another important indicator of an economy's
stability. Inflation is a sustained rise in prices that devalues money. It is a result of increased costs
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