WGU C211 OBJECTIVE ASSESSMENT ACTUAL 2026/2027 |
Global Economics for Managers Exam | Verified Answers |
100% Guarantee Pass | A+ Graded
Section 1: Microeconomics Foundations for Managers (Q1-15)
Q1. A manager observes that when the price of a product rises from $20 to $24, the
quantity demanded falls from 100 units to 80 units. Using the midpoint method, the
price elasticity of demand is approximately:
A. 0.55, indicating inelastic demand
B. 0.82, indicating inelastic demand
C. 1.22, indicating elastic demand
D. 2.00, indicating elastic demand
C. 1.22, indicating elastic demand [CORRECT]
Rationale: Using the midpoint formula, %ΔQd = -20/90 = -22.2% and %ΔP = 4/22 =
18.2%; Ed = |-22.2/18.2| = 1.22, which is greater than 1 (elastic), meaning consumers are
relatively price-sensitive.
Correct Answer: C
Q2. The law of demand states that, ceteris paribus:
A. As price increases, quantity demanded increases
B. As price increases, quantity demanded decreases
C. As income increases, demand shifts left for all goods
D. As the number of buyers increases, price must fall
B. As price increases, quantity demanded decreases [CORRECT]
Rationale: The law of demand describes an inverse relationship between price and
quantity demanded, holding all other factors constant (ceteris paribus).
Correct Answer: B
Q3. A software company sells a specialized project management tool and discovers
that demand is highly inelastic. To increase total revenue, the manager should:
A. Decrease price significantly to attract more customers
,B. Increase price, because the percentage decrease in quantity demanded will be
smaller than the percentage increase in price
C. Keep the price unchanged regardless of market conditions
D. Give the product away to maximize market share
B. Increase price, because the percentage decrease in quantity demanded will be
smaller than the percentage increase in price [CORRECT]
Rationale: When demand is inelastic, a price increase raises total revenue because
consumers are relatively unresponsive to price changes; lowering price would reduce
revenue.
Correct Answer: B
Q4. Which of the following would shift the supply curve for smartphones to the right?
A. An increase in the wage of factory workers
B. A technological breakthrough that reduces assembly time by 30%
C. An increase in the price of smartphones
D. An expectation that future prices will rise significantly
B. A technological breakthrough that reduces assembly time by 30% [CORRECT]
Rationale: A rightward supply shift indicates increased supply at each price; improved
technology lowers production costs, whereas higher input costs or expected future
price increases shift supply left.
Correct Answer: B
Q5. A city imposes a rent control ceiling set below the market equilibrium price. The
immediate result will be:
A. A surplus of rental units
B. A shortage of rental units because quantity demanded exceeds quantity supplied
C. An increase in the quality of rental housing
D. No effect on the rental market
B. A shortage of rental units because quantity demanded exceeds quantity supplied
[CORRECT]
Rationale: A binding price ceiling below equilibrium creates excess demand (shortage)
because landlords supply fewer units while consumers demand more at the artificially
low price.
Correct Answer: B
, Q6. Consumer surplus in a market is represented graphically as the area:
A. Above the supply curve and below the market price
B. Below the demand curve and above the market price
C. Below the supply curve and above the market price
D. Above the demand curve and below the market price
B. Below the demand curve and above the market price [CORRECT]
Rationale: Consumer surplus measures the difference between consumers' willingness
to pay (demand curve) and the actual price paid, represented by the area below demand
and above price.
Correct Answer: B
Q7. Producer surplus in a market is represented graphically as the area:
A. Below the demand curve and above the market price
B. Above the supply curve and below the market price
C. Below the supply curve and above the market price
D. Above the demand curve and below the market price
B. Above the supply curve and below the market price [CORRECT]
Rationale: Producer surplus is the difference between the market price received and the
minimum price producers are willing to accept (supply curve), shown as the area above
supply and below price.
Correct Answer: B
Q8. The government imposes an excise tax on gasoline. If demand is inelastic and
supply is elastic, the burden of the tax falls primarily on:
A. Producers, because they cannot pass costs to consumers
B. Consumers, because they are relatively unresponsive to price changes
C. The government, which absorbs the deadweight loss
D. Neither group; taxes are always split equally
B. Consumers, because they are relatively unresponsive to price changes [CORRECT]
Rationale: Tax incidence falls more heavily on the side of the market that is less elastic;
inelastic demand means consumers continue buying despite higher prices, bearing
most of the tax burden.
Correct Answer: B
Global Economics for Managers Exam | Verified Answers |
100% Guarantee Pass | A+ Graded
Section 1: Microeconomics Foundations for Managers (Q1-15)
Q1. A manager observes that when the price of a product rises from $20 to $24, the
quantity demanded falls from 100 units to 80 units. Using the midpoint method, the
price elasticity of demand is approximately:
A. 0.55, indicating inelastic demand
B. 0.82, indicating inelastic demand
C. 1.22, indicating elastic demand
D. 2.00, indicating elastic demand
C. 1.22, indicating elastic demand [CORRECT]
Rationale: Using the midpoint formula, %ΔQd = -20/90 = -22.2% and %ΔP = 4/22 =
18.2%; Ed = |-22.2/18.2| = 1.22, which is greater than 1 (elastic), meaning consumers are
relatively price-sensitive.
Correct Answer: C
Q2. The law of demand states that, ceteris paribus:
A. As price increases, quantity demanded increases
B. As price increases, quantity demanded decreases
C. As income increases, demand shifts left for all goods
D. As the number of buyers increases, price must fall
B. As price increases, quantity demanded decreases [CORRECT]
Rationale: The law of demand describes an inverse relationship between price and
quantity demanded, holding all other factors constant (ceteris paribus).
Correct Answer: B
Q3. A software company sells a specialized project management tool and discovers
that demand is highly inelastic. To increase total revenue, the manager should:
A. Decrease price significantly to attract more customers
,B. Increase price, because the percentage decrease in quantity demanded will be
smaller than the percentage increase in price
C. Keep the price unchanged regardless of market conditions
D. Give the product away to maximize market share
B. Increase price, because the percentage decrease in quantity demanded will be
smaller than the percentage increase in price [CORRECT]
Rationale: When demand is inelastic, a price increase raises total revenue because
consumers are relatively unresponsive to price changes; lowering price would reduce
revenue.
Correct Answer: B
Q4. Which of the following would shift the supply curve for smartphones to the right?
A. An increase in the wage of factory workers
B. A technological breakthrough that reduces assembly time by 30%
C. An increase in the price of smartphones
D. An expectation that future prices will rise significantly
B. A technological breakthrough that reduces assembly time by 30% [CORRECT]
Rationale: A rightward supply shift indicates increased supply at each price; improved
technology lowers production costs, whereas higher input costs or expected future
price increases shift supply left.
Correct Answer: B
Q5. A city imposes a rent control ceiling set below the market equilibrium price. The
immediate result will be:
A. A surplus of rental units
B. A shortage of rental units because quantity demanded exceeds quantity supplied
C. An increase in the quality of rental housing
D. No effect on the rental market
B. A shortage of rental units because quantity demanded exceeds quantity supplied
[CORRECT]
Rationale: A binding price ceiling below equilibrium creates excess demand (shortage)
because landlords supply fewer units while consumers demand more at the artificially
low price.
Correct Answer: B
, Q6. Consumer surplus in a market is represented graphically as the area:
A. Above the supply curve and below the market price
B. Below the demand curve and above the market price
C. Below the supply curve and above the market price
D. Above the demand curve and below the market price
B. Below the demand curve and above the market price [CORRECT]
Rationale: Consumer surplus measures the difference between consumers' willingness
to pay (demand curve) and the actual price paid, represented by the area below demand
and above price.
Correct Answer: B
Q7. Producer surplus in a market is represented graphically as the area:
A. Below the demand curve and above the market price
B. Above the supply curve and below the market price
C. Below the supply curve and above the market price
D. Above the demand curve and below the market price
B. Above the supply curve and below the market price [CORRECT]
Rationale: Producer surplus is the difference between the market price received and the
minimum price producers are willing to accept (supply curve), shown as the area above
supply and below price.
Correct Answer: B
Q8. The government imposes an excise tax on gasoline. If demand is inelastic and
supply is elastic, the burden of the tax falls primarily on:
A. Producers, because they cannot pass costs to consumers
B. Consumers, because they are relatively unresponsive to price changes
C. The government, which absorbs the deadweight loss
D. Neither group; taxes are always split equally
B. Consumers, because they are relatively unresponsive to price changes [CORRECT]
Rationale: Tax incidence falls more heavily on the side of the market that is less elastic;
inelastic demand means consumers continue buying despite higher prices, bearing
most of the tax burden.
Correct Answer: B
