WGU C211 OA Global Economics Exam Latest (2024 / 2025) (Verified Answers

Suppose that the United States imposes a tariff on avocados imported from Mexico. What impact will this have on the price paid for avocados by United States citizens? - ANSWERS The price will increase. Which of the following is a consequence of a country imposing a tariff on imported goods? - ANSWERS The demand for foreign produced goods decreases. Suppose that the United States imposes a tariff on salt. What impact might this tariff have on the price for domestic consumers? - ANSWERS Consumers will pay a higher price. Applying a tariff to coconuts will have the following effect: - ANSWERS Increase the domestic price of coconuts. Which of the following is NOT a restriction to trade? - ANSWERS Free trade areas. What is the significant difference between an import quota and a tariff? - ANSWERS A tariff raises revenue for the government and an import quota creates surplus for those who obtain licenses to import. Suppose that the price of a good increases (all else held constant). Which of the following would happen along with the change in price? - ANSWERS Consumer surplus would decrease. Suppose that Bob goes to the market and is willing to pay $500 for a new chainsaw. Bob is able to find the chainsaw for only $400. Which of the following follows from Bob's circumstance? - ANSWERS His consumer surplus is $100. Which statement is true of consumer surplus? - ANSWERS Consumer surplus represents value to buyers in excess of the price paid for the product. Which statement is true? - ANSWERS Total surplus is the sum of consumer and producer surplus and is graphically represented as the area between the supply and demand curves up to the equilibrium quantity. Suppose that Bob lives in the United States, but has been working in Mexico for the last 5 years. Where is the value of Bob's production counted during the last 5 years? - ANSWERS U.S. GNP and Mexico's GDP. Which of the following statements describes gross domestic product (GDP)? - ANSWERS GDP is the most used measure of a country's economic wellbeing. Which of the following is an investment included in the gross domestic product (GDP) measure? - ANSWERS Spending on new residential construction. Gross Domestic Product (GDP) measures which of the following? - ANSWERS Market value of final goods and services produced within a country in a given period of time. Which item is NOT part of GDP? - ANSWERS Purchasing a used hairdryer. What is the key distinction between real and nominal GDP? - ANSWERS Real GDP measures production not affected by changes in prices while nominal GDP measures production measured at current prices. What is the change in total cost equal to in the marginal cost equation? - ANSWERS Marginal cost multiplied by change in quantity. Fixed costs equal: - ANSWERS Total costs minus variable costs Economic profit is distinct from accounting profit because: - ANSWERS Economic profit incorporates both explicit and implicit costs. Total costs include: - ANSWERS Variable costs plus fixed costs. Marginal costs consider: - ANSWERS The increase in total cost arising from an extra unit of production. What response best describes the relationship between marginal costs and total costs? - ANSWERS Whenever marginal cost is less than average total cost, average total cost is falling. Which statement is true about productivity? - ANSWERS The value of marginal product of labor equals wage in a competitive firm. A production function expresses the relationship between: - ANSWERS Quantity of resource inputs and product/service outputs. Opportunity costs include: - ANSWERS The income the entrepreneur could have earned working for an employer. Economists and decision makers study and then make decisions or judgments based on (select best answer): - ANSWERS Marginal analysis. The primary reason that the marginal cost curve declines and then increases is: - ANSWERS Firms experience increasing marginal product, then diminishing marginal product. Which of the following statements is accurate? - ANSWERS Marginal costs eventually rise with the quantity of output. Consider the following example: A perfectly competitive firm finds that at current production levels marginal cost is greater than marginal revenue. What action should this firm take in order to pursue the maximization of profit? - ANSWERS Decrease the target output. A competitive firm is characterized by: - ANSWERS Trading of identical products. Competitive firms experience marginal revenue that is: - ANSWERS Equal to price. In the short-run, a competitive firm would continue to produce under the following circumstance: - ANSWERS Total revenue exceeds total variable costs.