WGU D080 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS FULL SOLUTION
●● What happens to consumer surplus when tariffs and quotas are
discontinued?
Answer: They increase
●● Which type of tariff is put in place to specifically ensure that
domestic industries are given an advantage?
Answer: Protective
●● What is a benefit of implementing a system of free trade?
Answer: Reduced tariffs would result in lower costs of imported raw
materials.
●● How are free trade agreements handled differently than treaties in the
United States?
Answer: Treaties must be approved by the Senate, whereas a free trade
agreement must pass both houses of Congress.
●● Treaties must be approved by the Senate, whereas a free trade
agreement must pass both houses of Congress.
Answer: Tariffs
,●● An airplane manufacturer outsources the manufacture of some its
parts and sub-assemblies. They are then returned to the manufacturer's
main plant for final assembly.
Answer: Value chain
●● Country A exports more goods to Country B than it imports from
Country B. Country A receives more monetary gain by using this
practice.
Which relationship does Country A have with Country B?
Answer: Trade surplus
●● Country A has been criticized by other countries for giving generous
tax credits to its corn farmers, which in turn, enables the country's
farmers to sell corn on the international markets cheaper than all other
countries.
Which term is used by other countries to describe this practice?
Answer: Government subsidies
●● A farmer knows that it takes 100 hours of labor to produce 100
bushels of corn. It only takes 50 hours of labor to produce 100 bushels of
soy. Currently, a bushel of corn is selling at three times a bushel of soy.
Which type of cost should the farmer use to determine what to plant?
Answer: Opportunity
,●● A country produces goods more efficiently than all other countries in
the same industry.
Which type of advantage does this country have?
Answer: Absolute
●● Country A exports farming equipment to Country B, while Country
B exports car manufacturing equipment to Country A. Both countries are
highly developed and could develop these industries separately but
instead made the decision to export and import these products from each
other.
Which unique condition caused this practice between the two countries?
Answer: Skill specialization
●● A company produces the same product over and over, and it has
caused the manufacturing cost of the product to become cheaper and
more competitive in international markets than similar products in the
industry.
Which approach is this company using to achieve this ability?
Answer: Economies of scale
●● A country with a new economy implemented trade protectionism in
relation to countries with more developed economies.
Why did the country take this action?
, Answer: To restrict international economic trade
●● How do anti dumping laws protect a domestic market?
Answer: They prevent foreign companies from selling goods and
services at or below cost.
●● How do Congress and the Department of Agriculture use quotas to
their advantage?
Answer: To increase domestic prices to specific levels to make products
profitable
●● Which strategy should a government use to offset the cost of
manufacturing domestically?
Answer: Subsidies
●● Which type of globalization refers to the international movement of
goods, capital, and services?
Answer: Economic
●● The CEO of an international company reminds the executive vice
presidents that while the company may do good while performing
corporate social responsibilities, the business has one ultimate goal since
it is engaged in commercial activities with corporate shareholders.
AND CORRECT ANSWERS FULL SOLUTION
●● What happens to consumer surplus when tariffs and quotas are
discontinued?
Answer: They increase
●● Which type of tariff is put in place to specifically ensure that
domestic industries are given an advantage?
Answer: Protective
●● What is a benefit of implementing a system of free trade?
Answer: Reduced tariffs would result in lower costs of imported raw
materials.
●● How are free trade agreements handled differently than treaties in the
United States?
Answer: Treaties must be approved by the Senate, whereas a free trade
agreement must pass both houses of Congress.
●● Treaties must be approved by the Senate, whereas a free trade
agreement must pass both houses of Congress.
Answer: Tariffs
,●● An airplane manufacturer outsources the manufacture of some its
parts and sub-assemblies. They are then returned to the manufacturer's
main plant for final assembly.
Answer: Value chain
●● Country A exports more goods to Country B than it imports from
Country B. Country A receives more monetary gain by using this
practice.
Which relationship does Country A have with Country B?
Answer: Trade surplus
●● Country A has been criticized by other countries for giving generous
tax credits to its corn farmers, which in turn, enables the country's
farmers to sell corn on the international markets cheaper than all other
countries.
Which term is used by other countries to describe this practice?
Answer: Government subsidies
●● A farmer knows that it takes 100 hours of labor to produce 100
bushels of corn. It only takes 50 hours of labor to produce 100 bushels of
soy. Currently, a bushel of corn is selling at three times a bushel of soy.
Which type of cost should the farmer use to determine what to plant?
Answer: Opportunity
,●● A country produces goods more efficiently than all other countries in
the same industry.
Which type of advantage does this country have?
Answer: Absolute
●● Country A exports farming equipment to Country B, while Country
B exports car manufacturing equipment to Country A. Both countries are
highly developed and could develop these industries separately but
instead made the decision to export and import these products from each
other.
Which unique condition caused this practice between the two countries?
Answer: Skill specialization
●● A company produces the same product over and over, and it has
caused the manufacturing cost of the product to become cheaper and
more competitive in international markets than similar products in the
industry.
Which approach is this company using to achieve this ability?
Answer: Economies of scale
●● A country with a new economy implemented trade protectionism in
relation to countries with more developed economies.
Why did the country take this action?
, Answer: To restrict international economic trade
●● How do anti dumping laws protect a domestic market?
Answer: They prevent foreign companies from selling goods and
services at or below cost.
●● How do Congress and the Department of Agriculture use quotas to
their advantage?
Answer: To increase domestic prices to specific levels to make products
profitable
●● Which strategy should a government use to offset the cost of
manufacturing domestically?
Answer: Subsidies
●● Which type of globalization refers to the international movement of
goods, capital, and services?
Answer: Economic
●● The CEO of an international company reminds the executive vice
presidents that while the company may do good while performing
corporate social responsibilities, the business has one ultimate goal since
it is engaged in commercial activities with corporate shareholders.
