WGU C211 Global Economics practice exam with correct answers and rationales
2026/2027 version A+ Graded
1. Which economic principle explains that resources are limited while human
wants are unlimited?
A. Scarcity
B. Equilibrium
C. Inflation
D. Productivity
Correct answer: A. Scarcity
Rationale: Scarcity exists because resources are limited relative to unlimited wants and needs.
2. The opportunity cost of a decision is:
A. The total monetary cost of the decision
B. The value of the next-best alternative that is given up
C. The cost of all available alternatives
D. The amount of profit earned
Correct answer: B. The value of the next-best alternative that is given up
Rationale: Opportunity cost measures what is sacrificed when one choice is made over another.
3. A production possibilities curve (PPC) illustrates:
A. The maximum combinations of two goods an economy can produce using available resources
and technology
B. The relationship between inflation and unemployment only
C. The amount of money in circulation
D. The demand for foreign currency
Correct answer: A. The maximum combinations of two goods an economy can produce using
available resources and technology
Rationale: The PPC demonstrates resource limitations, trade-offs, efficiency, and opportunity
cost.
,4. A point inside a production possibilities curve generally represents:
A. Productive inefficiency or underutilized resources
B. An unattainable production combination
C. Maximum economic efficiency
D. Economic growth
Correct answer: A. Productive inefficiency or underutilized resources
Rationale: Points inside the curve indicate that the economy could produce more with its
existing resources.
5. A point outside the current production possibilities curve is:
A. Currently unattainable with existing resources and technology
B. Always economically efficient
C. A point of unemployment
D. The economy's current equilibrium
Correct answer: A. Currently unattainable with existing resources and technology
Rationale: Production beyond the current frontier requires additional resources, improved
technology, or both.
6. According to the law of demand, holding other factors constant:
A. Quantity demanded generally decreases as price increases
B. Quantity demanded increases as price increases
C. Price has no effect on quantity demanded
D. Demand always equals supply
Correct answer: A. Quantity demanded generally decreases as price increases
Rationale: The law of demand describes an inverse relationship between price and quantity
demanded, ceteris paribus.
7. According to the law of supply, holding other factors constant:
A. Producers generally supply more when the market price increases
B. Producers always supply less when price increases
,C. Supply is unrelated to price
D. Demand determines the quantity supplied in every situation
Correct answer: A. Producers generally supply more when the market price increases
Rationale: Higher prices generally provide producers with greater incentives to supply a
product.
8. A movement along a demand curve is caused by a change in:
A. The price of the good itself
B. Consumer income
C. Consumer preferences
D. The price of a substitute good
Correct answer: A. The price of the good itself
Rationale: Changes in factors other than the good's own price shift the demand curve rather than
causing movement along it.
9. Which change would most likely shift the demand curve for a normal good to
the right?
A. An increase in consumer income
B. A decrease in consumer income
C. A decrease in the price of the good itself
D. An increase in production costs
Correct answer: A. An increase in consumer income
Rationale: Consumers generally purchase more normal goods when their income increases.
10. If two goods are substitutes, an increase in the price of one good will
generally:
A. Increase demand for the other good
B. Decrease demand for the other good
C. Have no effect on the other good
D. Eliminate both goods from the market
, Correct answer: A. Increase demand for the other good
Rationale: Consumers may switch to the relatively less expensive substitute.
11. If two goods are complements, an increase in the price of one good will
generally:
A. Decrease demand for the complementary good
B. Increase demand for the complementary good
C. Have no effect on the complementary good
D. Increase the supply of both goods automatically
Correct answer: A. Decrease demand for the complementary good
Rationale: Complementary goods are consumed together, so a price increase in one can reduce
demand for the other.
12. Market equilibrium occurs when:
A. Quantity demanded equals quantity supplied
B. Price is always at its maximum
C. Supply is zero
D. Demand is unlimited
Correct answer: A. Quantity demanded equals quantity supplied
Rationale: The equilibrium price and quantity occur where the demand and supply curves
intersect.
13. A surplus occurs when:
A. Quantity supplied exceeds quantity demanded
B. Quantity demanded exceeds quantity supplied
C. Demand equals supply
D. Production is impossible
Correct answer: A. Quantity supplied exceeds quantity demanded
Rationale: A surplus occurs when producers offer more goods than consumers are willing to
purchase at the current price.
2026/2027 version A+ Graded
1. Which economic principle explains that resources are limited while human
wants are unlimited?
A. Scarcity
B. Equilibrium
C. Inflation
D. Productivity
Correct answer: A. Scarcity
Rationale: Scarcity exists because resources are limited relative to unlimited wants and needs.
2. The opportunity cost of a decision is:
A. The total monetary cost of the decision
B. The value of the next-best alternative that is given up
C. The cost of all available alternatives
D. The amount of profit earned
Correct answer: B. The value of the next-best alternative that is given up
Rationale: Opportunity cost measures what is sacrificed when one choice is made over another.
3. A production possibilities curve (PPC) illustrates:
A. The maximum combinations of two goods an economy can produce using available resources
and technology
B. The relationship between inflation and unemployment only
C. The amount of money in circulation
D. The demand for foreign currency
Correct answer: A. The maximum combinations of two goods an economy can produce using
available resources and technology
Rationale: The PPC demonstrates resource limitations, trade-offs, efficiency, and opportunity
cost.
,4. A point inside a production possibilities curve generally represents:
A. Productive inefficiency or underutilized resources
B. An unattainable production combination
C. Maximum economic efficiency
D. Economic growth
Correct answer: A. Productive inefficiency or underutilized resources
Rationale: Points inside the curve indicate that the economy could produce more with its
existing resources.
5. A point outside the current production possibilities curve is:
A. Currently unattainable with existing resources and technology
B. Always economically efficient
C. A point of unemployment
D. The economy's current equilibrium
Correct answer: A. Currently unattainable with existing resources and technology
Rationale: Production beyond the current frontier requires additional resources, improved
technology, or both.
6. According to the law of demand, holding other factors constant:
A. Quantity demanded generally decreases as price increases
B. Quantity demanded increases as price increases
C. Price has no effect on quantity demanded
D. Demand always equals supply
Correct answer: A. Quantity demanded generally decreases as price increases
Rationale: The law of demand describes an inverse relationship between price and quantity
demanded, ceteris paribus.
7. According to the law of supply, holding other factors constant:
A. Producers generally supply more when the market price increases
B. Producers always supply less when price increases
,C. Supply is unrelated to price
D. Demand determines the quantity supplied in every situation
Correct answer: A. Producers generally supply more when the market price increases
Rationale: Higher prices generally provide producers with greater incentives to supply a
product.
8. A movement along a demand curve is caused by a change in:
A. The price of the good itself
B. Consumer income
C. Consumer preferences
D. The price of a substitute good
Correct answer: A. The price of the good itself
Rationale: Changes in factors other than the good's own price shift the demand curve rather than
causing movement along it.
9. Which change would most likely shift the demand curve for a normal good to
the right?
A. An increase in consumer income
B. A decrease in consumer income
C. A decrease in the price of the good itself
D. An increase in production costs
Correct answer: A. An increase in consumer income
Rationale: Consumers generally purchase more normal goods when their income increases.
10. If two goods are substitutes, an increase in the price of one good will
generally:
A. Increase demand for the other good
B. Decrease demand for the other good
C. Have no effect on the other good
D. Eliminate both goods from the market
, Correct answer: A. Increase demand for the other good
Rationale: Consumers may switch to the relatively less expensive substitute.
11. If two goods are complements, an increase in the price of one good will
generally:
A. Decrease demand for the complementary good
B. Increase demand for the complementary good
C. Have no effect on the complementary good
D. Increase the supply of both goods automatically
Correct answer: A. Decrease demand for the complementary good
Rationale: Complementary goods are consumed together, so a price increase in one can reduce
demand for the other.
12. Market equilibrium occurs when:
A. Quantity demanded equals quantity supplied
B. Price is always at its maximum
C. Supply is zero
D. Demand is unlimited
Correct answer: A. Quantity demanded equals quantity supplied
Rationale: The equilibrium price and quantity occur where the demand and supply curves
intersect.
13. A surplus occurs when:
A. Quantity supplied exceeds quantity demanded
B. Quantity demanded exceeds quantity supplied
C. Demand equals supply
D. Production is impossible
Correct answer: A. Quantity supplied exceeds quantity demanded
Rationale: A surplus occurs when producers offer more goods than consumers are willing to
purchase at the current price.
