WGU C211 Global Economics Competency Prep 70 Questions |
Accurate & Verified Answers to Pass Actual Exam
1. What is the definition of ‘opportunity cost’?
A. The total monetary cost of a business venture
B. The cost of all inputs used in production
C. The value of the next best alternative given up
D. The loss incurred when a product is sold below cost
Answer: C
Explanation: Opportunity cost refers to the potential benefit that is forfeited when one
alternative is chosen over another.
2. According to the law of demand, if the price of a good increases, what
happens?
A. The demand curve shifts to the right
B. The quantity demanded increases
C. The quantity demanded decreases
D. The supply curve shifts to the left
Answer: C
Explanation: The law of demand states that there is an inverse relationship between price
and quantity demanded, ceteris paribus.
,3. Which of the following would cause a rightward shift in the supply curve for
bread?
A. An increase in the price of bread
B. A decrease in the price of flour
C. A consumer boycott of bread
D. An increase in the wages of bakers
Answer: B
Explanation: A decrease in input costs (flour) makes production cheaper, encouraging
producers to supply more at every price level.
4. What occurs when a price ceiling is set below the equilibrium price?
A. A surplus of the product
B. An increase in producer surplus
C. A shortage of the product
D. Equilibrium is reached faster
Answer: C
Explanation: A price ceiling prevents prices from rising to equilibrium, leading to quantity
demanded exceeding quantity supplied.
,5. Which market structure is characterized by a single firm with no close
substitutes?
A. Perfect Competition
B. Oligopoly
C. Monopolistic Competition
D. Monopoly
Answer: D
Explanation: A monopoly exists when one company is the sole provider of a good or
service in a market.
6. Which component of GDP includes spending by households on goods and
services?
A. Investment
B. Government Purchases
C. Net Exports
D. Consumption
Answer: D
Explanation: Consumption is the largest component of GDP and includes all private
spending by households.
, 7. What is the main difference between Nominal GDP and Real GDP?
A. Real GDP is adjusted for inflation; Nominal GDP is not
B. Real GDP includes imports; Nominal GDP does not
C. Nominal GDP is adjusted for taxes; Real GDP is not
D. Real GDP only counts services; Nominal GDP counts goods
Answer: A
Explanation: Real GDP uses constant prices to remove the effects of inflation, allowing for
comparisons of physical output over time.
8. Frictional unemployment occurs when:
A. Technology replaces human labor
B. A recession causes a decline in total spending
C. Workers’ skills no longer match the jobs available
D. Workers are between jobs or entering the workforce
Answer: D
Explanation: Frictional unemployment is the temporary period of unemployment while
workers search for or transition to new jobs.
9. Which type of unemployment is directly related to the business cycle?
A. Structural unemployment
B. Cyclical unemployment
C. Frictional unemployment
Accurate & Verified Answers to Pass Actual Exam
1. What is the definition of ‘opportunity cost’?
A. The total monetary cost of a business venture
B. The cost of all inputs used in production
C. The value of the next best alternative given up
D. The loss incurred when a product is sold below cost
Answer: C
Explanation: Opportunity cost refers to the potential benefit that is forfeited when one
alternative is chosen over another.
2. According to the law of demand, if the price of a good increases, what
happens?
A. The demand curve shifts to the right
B. The quantity demanded increases
C. The quantity demanded decreases
D. The supply curve shifts to the left
Answer: C
Explanation: The law of demand states that there is an inverse relationship between price
and quantity demanded, ceteris paribus.
,3. Which of the following would cause a rightward shift in the supply curve for
bread?
A. An increase in the price of bread
B. A decrease in the price of flour
C. A consumer boycott of bread
D. An increase in the wages of bakers
Answer: B
Explanation: A decrease in input costs (flour) makes production cheaper, encouraging
producers to supply more at every price level.
4. What occurs when a price ceiling is set below the equilibrium price?
A. A surplus of the product
B. An increase in producer surplus
C. A shortage of the product
D. Equilibrium is reached faster
Answer: C
Explanation: A price ceiling prevents prices from rising to equilibrium, leading to quantity
demanded exceeding quantity supplied.
,5. Which market structure is characterized by a single firm with no close
substitutes?
A. Perfect Competition
B. Oligopoly
C. Monopolistic Competition
D. Monopoly
Answer: D
Explanation: A monopoly exists when one company is the sole provider of a good or
service in a market.
6. Which component of GDP includes spending by households on goods and
services?
A. Investment
B. Government Purchases
C. Net Exports
D. Consumption
Answer: D
Explanation: Consumption is the largest component of GDP and includes all private
spending by households.
, 7. What is the main difference between Nominal GDP and Real GDP?
A. Real GDP is adjusted for inflation; Nominal GDP is not
B. Real GDP includes imports; Nominal GDP does not
C. Nominal GDP is adjusted for taxes; Real GDP is not
D. Real GDP only counts services; Nominal GDP counts goods
Answer: A
Explanation: Real GDP uses constant prices to remove the effects of inflation, allowing for
comparisons of physical output over time.
8. Frictional unemployment occurs when:
A. Technology replaces human labor
B. A recession causes a decline in total spending
C. Workers’ skills no longer match the jobs available
D. Workers are between jobs or entering the workforce
Answer: D
Explanation: Frictional unemployment is the temporary period of unemployment while
workers search for or transition to new jobs.
9. Which type of unemployment is directly related to the business cycle?
A. Structural unemployment
B. Cyclical unemployment
C. Frictional unemployment
