WGU C211 OA GLOBAL ECONOMICS FOR
MANAGERS EXAM MASTER REVIEW SET 2026
◉ Explicit Costs. Answer: Monetary payments, material costs, wages,
interest
◉ Implicit costs. Answer: Income you would have earned; value of
the next best use; depreciation and forgone interest
◉ Accounting profit. Answer: Total revenue - explicit costs
◉ Economic profit. Answer: TR - economic costs
◉ Economic profit. Answer: TR - opportunity costs
◉ Economic profit. Answer: TR - explicit costs - implicit costs
◉ The short run. Answer: Firms can vary their output by changing
resources used
◉ The long run. Answer: Firms can enter and exit
,◉ Total costs. Answer: Fixed cost + variable costs
◉ Average fixed cost. Answer: TFC/Q
◉ Average variable cost. Answer: TVC/Q
◉ Average total cost. Answer: TC/Q or TFC/Q+TVC/Q
◉ Marginal cost. Answer: change in TC/Q
◉ ATC Curve. Answer: U shaped
◉ Diseconomies of Scale. Answer: Large firms often have problems
of communication and cooperation
◉ Economies of Scale. Answer: Labor specialization, managerial
specialization, efficient capital
◉ Zero economic profit. Answer: Positive accounting profit
◉ Maximize profit. Answer: Total revenue - total cost
,◉ The goal of firms. Answer: Maximize profit
◉ Marginal cost. Answer: The amount by which total cost would rise
if output were increased by one unit
◉ Minimum of average total cost. Answer: The point where
marginal-cost curve crosses average total cost curve
◉ Four market models. Answer: Perfect, monopolistic, oligopoly,
pure monopoly
◉ Perfect/pure competition. Answer: large number of firms,
homogenous goods, price taker, free entry & exit
◉ Monopolistic competition. Answer: many firms, differentiated
goods, some control over price, free entry & exit
◉ Oligopolistic competition. Answer: few firms,
homogenous/differentiated products, price is interdependent,
significant barriers to entry/exit
◉ Monopoly. Answer: one firm, no close substitute for goods, price
maker, barrier to entry/exit
, ◉ AR. Answer: TR/Q
◉ MR. Answer: Change in TR / Change in Q
◉ Profit maximization. Answer: 1. Produce where TR-TC is greatest
or 2. MR = MC
◉ Zero economic profit. Answer: Break even point (TR = TC)
◉ Short run shut down. Answer: Produce if TR < TVC or P < AVC
◉ Barriers to entry. Answer: Ownership or control of essential
resources, pricing or other strategic barriers, legal barriers,
economies of scale
◉ Monopoly demand curve. Answer: downward sloping demand;
increase sales by lowering price (MR < P)
◉ Monopoly produces. Answer: MR = MC
◉ Monopoly price. Answer: above MC
MANAGERS EXAM MASTER REVIEW SET 2026
◉ Explicit Costs. Answer: Monetary payments, material costs, wages,
interest
◉ Implicit costs. Answer: Income you would have earned; value of
the next best use; depreciation and forgone interest
◉ Accounting profit. Answer: Total revenue - explicit costs
◉ Economic profit. Answer: TR - economic costs
◉ Economic profit. Answer: TR - opportunity costs
◉ Economic profit. Answer: TR - explicit costs - implicit costs
◉ The short run. Answer: Firms can vary their output by changing
resources used
◉ The long run. Answer: Firms can enter and exit
,◉ Total costs. Answer: Fixed cost + variable costs
◉ Average fixed cost. Answer: TFC/Q
◉ Average variable cost. Answer: TVC/Q
◉ Average total cost. Answer: TC/Q or TFC/Q+TVC/Q
◉ Marginal cost. Answer: change in TC/Q
◉ ATC Curve. Answer: U shaped
◉ Diseconomies of Scale. Answer: Large firms often have problems
of communication and cooperation
◉ Economies of Scale. Answer: Labor specialization, managerial
specialization, efficient capital
◉ Zero economic profit. Answer: Positive accounting profit
◉ Maximize profit. Answer: Total revenue - total cost
,◉ The goal of firms. Answer: Maximize profit
◉ Marginal cost. Answer: The amount by which total cost would rise
if output were increased by one unit
◉ Minimum of average total cost. Answer: The point where
marginal-cost curve crosses average total cost curve
◉ Four market models. Answer: Perfect, monopolistic, oligopoly,
pure monopoly
◉ Perfect/pure competition. Answer: large number of firms,
homogenous goods, price taker, free entry & exit
◉ Monopolistic competition. Answer: many firms, differentiated
goods, some control over price, free entry & exit
◉ Oligopolistic competition. Answer: few firms,
homogenous/differentiated products, price is interdependent,
significant barriers to entry/exit
◉ Monopoly. Answer: one firm, no close substitute for goods, price
maker, barrier to entry/exit
, ◉ AR. Answer: TR/Q
◉ MR. Answer: Change in TR / Change in Q
◉ Profit maximization. Answer: 1. Produce where TR-TC is greatest
or 2. MR = MC
◉ Zero economic profit. Answer: Break even point (TR = TC)
◉ Short run shut down. Answer: Produce if TR < TVC or P < AVC
◉ Barriers to entry. Answer: Ownership or control of essential
resources, pricing or other strategic barriers, legal barriers,
economies of scale
◉ Monopoly demand curve. Answer: downward sloping demand;
increase sales by lowering price (MR < P)
◉ Monopoly produces. Answer: MR = MC
◉ Monopoly price. Answer: above MC
