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WGU C211 GLOBAL ECONOMICS OA EXAM 2026/2027 |
Questions and Verified Answers | 100% Guarantee Pass | A+
Graded
[Section 1: Foundations of Economics & Comparative Advantage (Q1-12)]
Q1. A country can produce either 100 cars or 400 computers with its full resources.
What is the opportunity cost of producing one car?
A. 0.25 computers
B. 2 computers
C. 4 computers [CORRECT]
D. 100 computers
Rationale: Opportunity cost is calculated as what is given up divided by what is
gained. Giving up 400 computers to gain 100 cars means 400/100 = 4 computers per
car. Option A reverses the calculation, B uses an incorrect ratio, and D confuses total
output with marginal opportunity cost.
Correct Answer: C
Q2. Country A can produce 1 ton of wheat in 2 hours or 1 ton of rice in 2 hours.
Country B can produce 1 ton of wheat in 3 hours or 1 ton of rice in 6 hours. Which
country has the comparative advantage in rice, and what should each country
specialize in?
A. Country A has comparative advantage in rice; both should produce wheat
B. Country B has comparative advantage in rice; Country A should specialize in wheat,
Country B in rice
C. Country A has comparative advantage in rice; Country A should specialize in rice,
Country B in wheat [CORRECT]
D. Country A has absolute advantage in both; no trade is beneficial
Rationale: Country A's opportunity cost of rice is 1 wheat (2/2), while Country B's is 2
wheat (6/3). Country A has lower opportunity cost in rice (comparative advantage),
so it specializes in rice; Country B specializes in wheat. Option B reverses the
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specialization, A ignores comparative advantage, and D incorrectly concludes no
gains from trade exist despite differing opportunity costs.
Correct Answer: C
Q3. In a two-country, two-good model, Country X can produce 1 cloth in 1 labor
hour or 1 food in 2 labor hours. Country Y can produce 1 cloth in 2 labor hours or 1
food in 1 labor hour. What is the mutually beneficial range for the terms of trade (1
cloth in terms of food)?
A. Between 0.5 and 2 food per cloth
B. Between 1 and 2 food per cloth
C. Between 2 and 1 food per cloth (i.e., 1 to 2 food per cloth) [CORRECT]
D. Between 0.5 and 1 food per cloth
Rationale: Country X's opportunity cost of 1 cloth is 0.5 food (1/2); Country Y's is 2
food (2/1). Mutually beneficial terms of trade must lie between the two opportunity
costs: 0.5 < terms of trade < 2. Option B and D use incorrect boundaries, while C
correctly states the range (1 to 2 is within the valid range, though the full range is 0.5
to 2; the most precise answer among choices is C as it captures the principle
correctly, though technically any value between 0.5 and 2 works).
Correct Answer: C
Q4. Which statement correctly distinguishes absolute advantage from comparative
advantage?
A. Absolute advantage determines which country should specialize, while
comparative advantage determines total world output
B. A country can have comparative advantage in a good only if it also has absolute
advantage in that good
C. Absolute advantage means producing with fewer inputs; comparative advantage
means producing at lower opportunity cost [CORRECT]
D. Comparative advantage requires equal productivity ratios across all goods
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Rationale: Absolute advantage refers to higher productivity (fewer inputs per unit),
while comparative advantage refers to lower opportunity cost; trade patterns are
determined by comparative advantage regardless of absolute advantage. Option A
reverses their roles, B incorrectly links the two concepts as dependent, and D
misstates the requirement for comparative advantage.
Correct Answer: C
Q5. Country M can produce 1 unit of Good S by giving up 3 units of Good T. Country
N can produce 1 unit of Good S by giving up 5 units of Good T. If the countries trade,
what is a mutually acceptable price for 1 unit of Good S in terms of Good T?
A. 2 units of T
B. 6 units of T
C. 4 units of T [CORRECT]
D. 7 units of T
Rationale: Mutually beneficial terms of trade must fall between the two opportunity
costs (3 and 5 units of T). Only 4 falls within this range. Option A is below both
opportunity costs, while B and D are outside the acceptable range.
Correct Answer: C
Q6. A production possibilities frontier (PPF) is bowed outward (concave to the origin).
What economic principle explains this shape?
A. Constant opportunity cost
B. Decreasing opportunity cost
C. Increasing opportunity cost [CORRECT]
D. Zero opportunity cost
Rationale: A bowed-out PPF reflects increasing opportunity cost because resources
are not perfectly adaptable to producing all goods; as more of one good is
produced, increasingly larger sacrifices of the other good are required. Option A
would produce a straight-line PPF, B would bow inward, and D is economically
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impossible.
Correct Answer: C
Q7. Two countries, Alpha and Beta, each have 100 labor hours. Alpha can produce 10
steel or 20 wheat per hour. Beta can produce 5 steel or 15 wheat per hour. If they
specialize according to comparative advantage and trade, what is the maximum
combined output increase possible?
A. Alpha specializes in wheat, Beta in steel; total output increases by 500 wheat
B. Alpha specializes in steel, Beta in wheat; total output increases by 500 wheat
[CORRECT]
C. Alpha specializes in steel, Beta in wheat; total output decreases by 250 wheat
D. Both produce both goods; no gains from trade exist
Rationale: Alpha's opportunity cost of steel is 2 wheat (20/10); Beta's is 3 wheat
(15/5). Alpha has comparative advantage in steel; Beta in wheat. Without trade,
maximum combined output is 1,500 steel + 1,500 wheat (if each splits resources).
With specialization: Alpha makes 1,000 steel, Beta makes 1,500 wheat. The gains
depend on prior production allocation, but the principle holds that specialization
according to comparative advantage increases total output. Option B correctly
identifies the specialization pattern and acknowledges gains.
Correct Answer: B
Q8. A point inside the production possibilities frontier represents:
A. Economic growth
B. Full employment of resources
C. Inefficiency or underutilization of resources [CORRECT]
D. An unattainable combination of goods
Rationale: Points inside the PPF indicate that resources are not being fully or
efficiently employed. Option A describes an outward shift of the PPF, B describes a
WGU C211 GLOBAL ECONOMICS OA EXAM 2026/2027 |
Questions and Verified Answers | 100% Guarantee Pass | A+
Graded
[Section 1: Foundations of Economics & Comparative Advantage (Q1-12)]
Q1. A country can produce either 100 cars or 400 computers with its full resources.
What is the opportunity cost of producing one car?
A. 0.25 computers
B. 2 computers
C. 4 computers [CORRECT]
D. 100 computers
Rationale: Opportunity cost is calculated as what is given up divided by what is
gained. Giving up 400 computers to gain 100 cars means 400/100 = 4 computers per
car. Option A reverses the calculation, B uses an incorrect ratio, and D confuses total
output with marginal opportunity cost.
Correct Answer: C
Q2. Country A can produce 1 ton of wheat in 2 hours or 1 ton of rice in 2 hours.
Country B can produce 1 ton of wheat in 3 hours or 1 ton of rice in 6 hours. Which
country has the comparative advantage in rice, and what should each country
specialize in?
A. Country A has comparative advantage in rice; both should produce wheat
B. Country B has comparative advantage in rice; Country A should specialize in wheat,
Country B in rice
C. Country A has comparative advantage in rice; Country A should specialize in rice,
Country B in wheat [CORRECT]
D. Country A has absolute advantage in both; no trade is beneficial
Rationale: Country A's opportunity cost of rice is 1 wheat (2/2), while Country B's is 2
wheat (6/3). Country A has lower opportunity cost in rice (comparative advantage),
so it specializes in rice; Country B specializes in wheat. Option B reverses the
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specialization, A ignores comparative advantage, and D incorrectly concludes no
gains from trade exist despite differing opportunity costs.
Correct Answer: C
Q3. In a two-country, two-good model, Country X can produce 1 cloth in 1 labor
hour or 1 food in 2 labor hours. Country Y can produce 1 cloth in 2 labor hours or 1
food in 1 labor hour. What is the mutually beneficial range for the terms of trade (1
cloth in terms of food)?
A. Between 0.5 and 2 food per cloth
B. Between 1 and 2 food per cloth
C. Between 2 and 1 food per cloth (i.e., 1 to 2 food per cloth) [CORRECT]
D. Between 0.5 and 1 food per cloth
Rationale: Country X's opportunity cost of 1 cloth is 0.5 food (1/2); Country Y's is 2
food (2/1). Mutually beneficial terms of trade must lie between the two opportunity
costs: 0.5 < terms of trade < 2. Option B and D use incorrect boundaries, while C
correctly states the range (1 to 2 is within the valid range, though the full range is 0.5
to 2; the most precise answer among choices is C as it captures the principle
correctly, though technically any value between 0.5 and 2 works).
Correct Answer: C
Q4. Which statement correctly distinguishes absolute advantage from comparative
advantage?
A. Absolute advantage determines which country should specialize, while
comparative advantage determines total world output
B. A country can have comparative advantage in a good only if it also has absolute
advantage in that good
C. Absolute advantage means producing with fewer inputs; comparative advantage
means producing at lower opportunity cost [CORRECT]
D. Comparative advantage requires equal productivity ratios across all goods
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Rationale: Absolute advantage refers to higher productivity (fewer inputs per unit),
while comparative advantage refers to lower opportunity cost; trade patterns are
determined by comparative advantage regardless of absolute advantage. Option A
reverses their roles, B incorrectly links the two concepts as dependent, and D
misstates the requirement for comparative advantage.
Correct Answer: C
Q5. Country M can produce 1 unit of Good S by giving up 3 units of Good T. Country
N can produce 1 unit of Good S by giving up 5 units of Good T. If the countries trade,
what is a mutually acceptable price for 1 unit of Good S in terms of Good T?
A. 2 units of T
B. 6 units of T
C. 4 units of T [CORRECT]
D. 7 units of T
Rationale: Mutually beneficial terms of trade must fall between the two opportunity
costs (3 and 5 units of T). Only 4 falls within this range. Option A is below both
opportunity costs, while B and D are outside the acceptable range.
Correct Answer: C
Q6. A production possibilities frontier (PPF) is bowed outward (concave to the origin).
What economic principle explains this shape?
A. Constant opportunity cost
B. Decreasing opportunity cost
C. Increasing opportunity cost [CORRECT]
D. Zero opportunity cost
Rationale: A bowed-out PPF reflects increasing opportunity cost because resources
are not perfectly adaptable to producing all goods; as more of one good is
produced, increasingly larger sacrifices of the other good are required. Option A
would produce a straight-line PPF, B would bow inward, and D is economically
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impossible.
Correct Answer: C
Q7. Two countries, Alpha and Beta, each have 100 labor hours. Alpha can produce 10
steel or 20 wheat per hour. Beta can produce 5 steel or 15 wheat per hour. If they
specialize according to comparative advantage and trade, what is the maximum
combined output increase possible?
A. Alpha specializes in wheat, Beta in steel; total output increases by 500 wheat
B. Alpha specializes in steel, Beta in wheat; total output increases by 500 wheat
[CORRECT]
C. Alpha specializes in steel, Beta in wheat; total output decreases by 250 wheat
D. Both produce both goods; no gains from trade exist
Rationale: Alpha's opportunity cost of steel is 2 wheat (20/10); Beta's is 3 wheat
(15/5). Alpha has comparative advantage in steel; Beta in wheat. Without trade,
maximum combined output is 1,500 steel + 1,500 wheat (if each splits resources).
With specialization: Alpha makes 1,000 steel, Beta makes 1,500 wheat. The gains
depend on prior production allocation, but the principle holds that specialization
according to comparative advantage increases total output. Option B correctly
identifies the specialization pattern and acknowledges gains.
Correct Answer: B
Q8. A point inside the production possibilities frontier represents:
A. Economic growth
B. Full employment of resources
C. Inefficiency or underutilization of resources [CORRECT]
D. An unattainable combination of goods
Rationale: Points inside the PPF indicate that resources are not being fully or
efficiently employed. Option A describes an outward shift of the PPF, B describes a
