WGU C211 Global Economics for Managers Actual Exam 2026/2027
with Detailed Rationales | Complete Exam-Style Questions | 100%
Verified | Pass Guaranteed – A+ Graded
EXAM INFORMATION
Total Questions: 50
Recommended Time: 75 minutes
Passing Threshold: 80%
Exam Format: Multiple Choice Questions (MCQs)
Question Style: Scenario-Based, Applied, and Professional Decision-Making Questions
==============================
SECTION 1: International Trade Theory and Policy
Question 1: A manager is analyzing the potential for trade between two countries.
Country A can produce 100 units of textiles or 50 units of electronics, while Country B
can produce 80 units of textiles or 160 units of electronics. According to the theory of
comparative advantage, which strategy should the manager recommend?
A. Country A should produce both goods to maximize total output
B. Country B should produce both goods because it has an absolute advantage in
electronics
C. Country A should specialize in textiles and Country B in electronics, then trade
D. Country A should specialize in electronics and Country B in textiles, then trade
Correct Answer: C
Rationale: Comparative advantage is determined by the opportunity cost of producing
one good in terms of the other. For Country A, 1 unit of electronics costs 2 units of
textiles. For Country B, 1 unit of electronics costs 0.5 units of textiles. Because Country
B has a lower opportunity cost for electronics, it should specialize there. Country A has
a lower opportunity cost for textiles, so it should specialize there.
Question 2: The Heckscher-Ohlin theory asserts that a country will export goods that
utilize its abundant factors of production. If a manager is looking to manufacture a
,highly labor-intensive product, which country profile would theoretically offer the
greatest factor cost advantage?
A. A country with an abundance of physical capital
B. A country with an abundance of unskilled labor
C. A country with an abundance of highly educated human capital
D. A country with an abundance of arable land
Correct Answer: B
Rationale: The Heckscher-Ohlin theory states that comparative advantage arises from
differences in factor endowments. A labor-intensive product will be produced most
efficiently and cost-effectively in a country that has an abundance of unskilled labor, as
the cost of labor will be lower relative to the cost of capital.
Question 3: A domestic industry group lobbies the government to implement a tariff on
imported steel, arguing that foreign producers are selling below the cost of production
to drive domestic firms out of business. Which concept is the industry group using to
justify this trade barrier?
A. Strategic trade policy
B. The infant industry argument
C. National security concerns
D. Anti-dumping policy
Correct Answer: D
Rationale: Anti-dumping policies are designed to punish foreign firms that sell goods in
a market below their cost of production or below the fair market value in their home
market. The industry group is claiming the foreign producers are dumping steel to
unfairly gain market share.
Question 4: A country's government implements a quota on imported agricultural
products. What is the most likely immediate effect of this policy on the domestic
market?
A. Domestic consumer surplus will increase
B. Domestic producer surplus will increase
C. The price of imported agricultural products will decrease
D. Total domestic economic welfare will increase
, Correct Answer: B
Rationale: An import quota restricts the quantity of a good that can be imported. This
reduces foreign competition, leading to higher domestic prices. Domestic producers
benefit from the higher prices and increased sales volume, thus increasing their
producer surplus, while domestic consumers suffer from higher prices and reduced
choices.
Question 5: A manager notices that their country's new strategic trade policy provides
subsidies to domestic aerospace firms to help them compete with a dominant foreign
competitor. Under what condition is this policy most likely to succeed in increasing
national welfare?
A. If the subsidies lead to retaliation from the foreign government
B. If the domestic firms operate in a perfectly competitive market
C. If the industry is a global oligopoly where first-mover advantages are crucial
D. If the domestic market is too small to support the aerospace firms
Correct Answer: C
Rationale: Strategic trade policy is most applicable in global oligopolies where firms
receive significant first-mover advantages and economies of scale. Government
subsidies can help a domestic firm overcome the high barriers to entry and capture a
larger share of the global market, potentially shifting monopoly profits from the foreign
firm to the domestic firm.
Question 6: Which economic observation, originally identified by Wassily Leontief, found
that the United States, despite being abundant in capital, exported labor-intensive goods
and imported capital-intensive goods?
A. The Stolper-Samuelson theorem
B. The Leontief paradox
C. The Rybczynski theorem
D. The Balassa-Samuelson effect
Correct Answer: B
Rationale: The Leontief paradox is the empirical finding that challenged the predictions
of the Heckscher-Ohlin theory. Leontief found that the United States, a capital-abundant
country, was exporting labor-intensive commodities and importing capital-intensive
commodities, which contradicted the standard Heckscher-Ohlin model.
with Detailed Rationales | Complete Exam-Style Questions | 100%
Verified | Pass Guaranteed – A+ Graded
EXAM INFORMATION
Total Questions: 50
Recommended Time: 75 minutes
Passing Threshold: 80%
Exam Format: Multiple Choice Questions (MCQs)
Question Style: Scenario-Based, Applied, and Professional Decision-Making Questions
==============================
SECTION 1: International Trade Theory and Policy
Question 1: A manager is analyzing the potential for trade between two countries.
Country A can produce 100 units of textiles or 50 units of electronics, while Country B
can produce 80 units of textiles or 160 units of electronics. According to the theory of
comparative advantage, which strategy should the manager recommend?
A. Country A should produce both goods to maximize total output
B. Country B should produce both goods because it has an absolute advantage in
electronics
C. Country A should specialize in textiles and Country B in electronics, then trade
D. Country A should specialize in electronics and Country B in textiles, then trade
Correct Answer: C
Rationale: Comparative advantage is determined by the opportunity cost of producing
one good in terms of the other. For Country A, 1 unit of electronics costs 2 units of
textiles. For Country B, 1 unit of electronics costs 0.5 units of textiles. Because Country
B has a lower opportunity cost for electronics, it should specialize there. Country A has
a lower opportunity cost for textiles, so it should specialize there.
Question 2: The Heckscher-Ohlin theory asserts that a country will export goods that
utilize its abundant factors of production. If a manager is looking to manufacture a
,highly labor-intensive product, which country profile would theoretically offer the
greatest factor cost advantage?
A. A country with an abundance of physical capital
B. A country with an abundance of unskilled labor
C. A country with an abundance of highly educated human capital
D. A country with an abundance of arable land
Correct Answer: B
Rationale: The Heckscher-Ohlin theory states that comparative advantage arises from
differences in factor endowments. A labor-intensive product will be produced most
efficiently and cost-effectively in a country that has an abundance of unskilled labor, as
the cost of labor will be lower relative to the cost of capital.
Question 3: A domestic industry group lobbies the government to implement a tariff on
imported steel, arguing that foreign producers are selling below the cost of production
to drive domestic firms out of business. Which concept is the industry group using to
justify this trade barrier?
A. Strategic trade policy
B. The infant industry argument
C. National security concerns
D. Anti-dumping policy
Correct Answer: D
Rationale: Anti-dumping policies are designed to punish foreign firms that sell goods in
a market below their cost of production or below the fair market value in their home
market. The industry group is claiming the foreign producers are dumping steel to
unfairly gain market share.
Question 4: A country's government implements a quota on imported agricultural
products. What is the most likely immediate effect of this policy on the domestic
market?
A. Domestic consumer surplus will increase
B. Domestic producer surplus will increase
C. The price of imported agricultural products will decrease
D. Total domestic economic welfare will increase
, Correct Answer: B
Rationale: An import quota restricts the quantity of a good that can be imported. This
reduces foreign competition, leading to higher domestic prices. Domestic producers
benefit from the higher prices and increased sales volume, thus increasing their
producer surplus, while domestic consumers suffer from higher prices and reduced
choices.
Question 5: A manager notices that their country's new strategic trade policy provides
subsidies to domestic aerospace firms to help them compete with a dominant foreign
competitor. Under what condition is this policy most likely to succeed in increasing
national welfare?
A. If the subsidies lead to retaliation from the foreign government
B. If the domestic firms operate in a perfectly competitive market
C. If the industry is a global oligopoly where first-mover advantages are crucial
D. If the domestic market is too small to support the aerospace firms
Correct Answer: C
Rationale: Strategic trade policy is most applicable in global oligopolies where firms
receive significant first-mover advantages and economies of scale. Government
subsidies can help a domestic firm overcome the high barriers to entry and capture a
larger share of the global market, potentially shifting monopoly profits from the foreign
firm to the domestic firm.
Question 6: Which economic observation, originally identified by Wassily Leontief, found
that the United States, despite being abundant in capital, exported labor-intensive goods
and imported capital-intensive goods?
A. The Stolper-Samuelson theorem
B. The Leontief paradox
C. The Rybczynski theorem
D. The Balassa-Samuelson effect
Correct Answer: B
Rationale: The Leontief paradox is the empirical finding that challenged the predictions
of the Heckscher-Ohlin theory. Leontief found that the United States, a capital-abundant
country, was exporting labor-intensive commodities and importing capital-intensive
commodities, which contradicted the standard Heckscher-Ohlin model.
