WGU C211 - Global Economics for Managers Exam
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. What is a budget constraint? - Correct Answer: the limit on the
consumption bundles that a consumer can afford
2. How might a budget constraint be impacted by an increase in income? -
Correct Answer: With higher income, a consumer can afford more of both
goods. The increase in income shifts the budget constraint OUTWARD.
3. What two graphical elements are needed in order to determine a
consumer's optimal point of consumption? - Correct Answer: Budget
Constraint- (The limit on the consumption bundles that a consumer can
afford) & Indifference curve
4. How is a consumer's optimal point of consumption determined precisely? -
Correct Answer: Where the budget contraction touches the indifference
curve
5. How is marginal cost derived? - Correct Answer: the increase in total
cost that arises from an extra unit of production
,6. How is marginal cost related to total cost? - Correct Answer: The
portion of total cost resulting from an extra unit of production.
7. What is the specific formula to calculate marginal cost? - Correct
Answer: MC= ^TC/^Q
8. If Dave's company has a total cost of $100 when quantity output is 5, and a
total cost of $115 when quantity output is 6, what is the marginal cost of
producing the 6th unit? - Correct Answer: Fixed cost - costs that do not
vary with the quantity of output produced
Variable Cost - costs that vary with the quantity produced
Total Cost (see below)
Variable Cost - Fixed Cost + Variable Cost
9. total cost - Correct Answer: the market value of the inputs a firm uses in
production
10.variable costs - Correct Answer: costs that vary with the quantity of
output produced
11.How does a firm determine to shut down in the short-run?
What rule characterizes this? - Correct Answer: If total revenue is less than
the total variable cost of production.
,That is, a firm that shuts down temporarily still has to pay its fixed costs,
whereas a firm that exits the market does not have to pay any costs at all, fixed
or variable.
12.What is a price taker? Which of the market structures are characterized as
being "price takers"? - Correct Answer: A large number of competitive
firms sells homogenous products therefore are price takers.
Perfect and Pure Competition
13.When a market is characterized as being a price taker, what fundamental
shape does the demand curve for this market take? - Correct Answer:
Horizontal line
14.How is the demand curve for a perfectly competitive firm distinct from the
demand curve for a monopolistic market? - Correct Answer: demand
curve for perfectly competitive firm is a price taker so its a straight
horizontal line while demand for a monopolist is not a price taker and is the
same as the market demand curve
15.What does "downward sloping" with regards to a demand curve mean? -
Correct Answer: Consumers demand more of a good when its price is
lower and less when its price is higher.
16.Where do firms with market power determine the quantity of
product/service they will produce? - Correct Answer: A firm chooses a
quantity of output such that marginal revenue equals marginal cost. The
, firm chooses quantity so that price equals marginal cost. Thus, the firm's
marginal-cost curve is its supply curve.
17.What is the primary goal/objective of the firm? - Correct Answer:
Maximize profit.
18.If the firm has price setting capacity, how will they use information about
marginal costs and marginal revenues in order to accomplish their primary
objective? - Correct Answer: The monopolist's profit-maximizing
quantity of output is determined by the intersection of the marginal-
revenue curve and the marginal-cost curve.
19.Describe the basic distinctions between the market models with respect to:
number of market participants, type of product being marketed, ease of
entry/exit into the market, and the prevalence of advertising/marketing. -
Correct Answer: Monopoly and Oligopoly have one to few firms, with
limited products (cable TV), entry is difficult, and advertising is a natural
feature. Monopolistic competition/perfect competition have many firms,
mono comp has differentiated products (novels/movies) and perfect comp
has identical products, entry is easy, and spend very little on advertising.
20.What fundamental truth is realized when studying the behavior of an
oligopolistic firm within the context/model called "prisoner's dilemma"? -
Correct Answer: Self-interest makes it difficult for the oligopolists to
maintain the cooperative outcome. Relentless logic of self-interest drives
the participants toward the non-cooperative outcome, which is worse for
both parties.
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. What is a budget constraint? - Correct Answer: the limit on the
consumption bundles that a consumer can afford
2. How might a budget constraint be impacted by an increase in income? -
Correct Answer: With higher income, a consumer can afford more of both
goods. The increase in income shifts the budget constraint OUTWARD.
3. What two graphical elements are needed in order to determine a
consumer's optimal point of consumption? - Correct Answer: Budget
Constraint- (The limit on the consumption bundles that a consumer can
afford) & Indifference curve
4. How is a consumer's optimal point of consumption determined precisely? -
Correct Answer: Where the budget contraction touches the indifference
curve
5. How is marginal cost derived? - Correct Answer: the increase in total
cost that arises from an extra unit of production
,6. How is marginal cost related to total cost? - Correct Answer: The
portion of total cost resulting from an extra unit of production.
7. What is the specific formula to calculate marginal cost? - Correct
Answer: MC= ^TC/^Q
8. If Dave's company has a total cost of $100 when quantity output is 5, and a
total cost of $115 when quantity output is 6, what is the marginal cost of
producing the 6th unit? - Correct Answer: Fixed cost - costs that do not
vary with the quantity of output produced
Variable Cost - costs that vary with the quantity produced
Total Cost (see below)
Variable Cost - Fixed Cost + Variable Cost
9. total cost - Correct Answer: the market value of the inputs a firm uses in
production
10.variable costs - Correct Answer: costs that vary with the quantity of
output produced
11.How does a firm determine to shut down in the short-run?
What rule characterizes this? - Correct Answer: If total revenue is less than
the total variable cost of production.
,That is, a firm that shuts down temporarily still has to pay its fixed costs,
whereas a firm that exits the market does not have to pay any costs at all, fixed
or variable.
12.What is a price taker? Which of the market structures are characterized as
being "price takers"? - Correct Answer: A large number of competitive
firms sells homogenous products therefore are price takers.
Perfect and Pure Competition
13.When a market is characterized as being a price taker, what fundamental
shape does the demand curve for this market take? - Correct Answer:
Horizontal line
14.How is the demand curve for a perfectly competitive firm distinct from the
demand curve for a monopolistic market? - Correct Answer: demand
curve for perfectly competitive firm is a price taker so its a straight
horizontal line while demand for a monopolist is not a price taker and is the
same as the market demand curve
15.What does "downward sloping" with regards to a demand curve mean? -
Correct Answer: Consumers demand more of a good when its price is
lower and less when its price is higher.
16.Where do firms with market power determine the quantity of
product/service they will produce? - Correct Answer: A firm chooses a
quantity of output such that marginal revenue equals marginal cost. The
, firm chooses quantity so that price equals marginal cost. Thus, the firm's
marginal-cost curve is its supply curve.
17.What is the primary goal/objective of the firm? - Correct Answer:
Maximize profit.
18.If the firm has price setting capacity, how will they use information about
marginal costs and marginal revenues in order to accomplish their primary
objective? - Correct Answer: The monopolist's profit-maximizing
quantity of output is determined by the intersection of the marginal-
revenue curve and the marginal-cost curve.
19.Describe the basic distinctions between the market models with respect to:
number of market participants, type of product being marketed, ease of
entry/exit into the market, and the prevalence of advertising/marketing. -
Correct Answer: Monopoly and Oligopoly have one to few firms, with
limited products (cable TV), entry is difficult, and advertising is a natural
feature. Monopolistic competition/perfect competition have many firms,
mono comp has differentiated products (novels/movies) and perfect comp
has identical products, entry is easy, and spend very little on advertising.
20.What fundamental truth is realized when studying the behavior of an
oligopolistic firm within the context/model called "prisoner's dilemma"? -
Correct Answer: Self-interest makes it difficult for the oligopolists to
maintain the cooperative outcome. Relentless logic of self-interest drives
the participants toward the non-cooperative outcome, which is worse for
both parties.
