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WGU – C211 Objective Assessment Final Exam
2026/2027 – Global Economics and International Trade
Questions with Answers||Newest Exam!!!
If a firm uses labor to produce output, the firm's production
function depicts the relationship between
a. marginal product and marginal cost.
b. the maximum quantity that the firm can produce as it
adds more capital to a fixed quantity of labor.
c. fixed inputs and variable inputs in the short run.
d. the number of workers and the quantity of output. -
ANSWER-the number of workers and the quantity of
output.
Which of the following represents the firm's short-run
condition for shutting down?
a. Shut down if TR < FC
b. Shut down if TR < TC
c. Shut down if P < ATC
d. Shut down if TR < VC - ANSWER-d. Shut down if TR <
VC
If there is an increase in market demand in a perfectly
competitive market, then in the short run
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a. profits will rise.
b. there will be no change in the demand curves faced by
individual firms in the market.
c. the demand curves facing firms will become more
elastic.
d. the demand curves facing firms will shift downward. -
ANSWER-profits will rise.
A competitive market is in long-run equilibrium. If demand
decreases, we can be certain that price will
a. fall in the short run. All firms will shut down, and some of
them will exit the industry. Price will then rise to reach the
new long-run equilibrium.
b. fall in the short run. All, some, or no firms will shut
down, and some of them will exit the industry. Price will
then rise to reach the new long-run equilibrium.
c. not fall in the short run because firms will exit to
maintain the price.
d. fall in the short run. No firms will shut down, but some of
them will exit the industry. Price will then rise to reach the
new long-run equilibrium. - ANSWER-fall in the short run.
All, some, or no firms will shut down, and some of them
will exit the industry. Price will then rise to reach the new
long-run equilibrium.
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When firms are said to be price takers, it implies that if a
firm raises its price,
a. competitors will also raise their prices.
b. buyers will pay the higher price in the short run.
c. firms in the industry will exercise market power.
d. buyers will go elsewhere. - ANSWER-buyers will go
elsewhere.
If a firm in a perfectly competitive market triples the
quantity of output sold, then total revenue will
a. more than triple.
b. less than triple.
c. exactly triple.
d. be reduced by one third. - ANSWER-exactly triple.
Whenever a perfectly competitive firm chooses to change
its level of output, its marginal revenue
a. increases if MR < ATC and decreases if MR > ATC.
b. always decreases.
c. does not change.
d. always increases. - ANSWER-does not change.
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Farmer McDonald sells wheat to a broker in Kansas City,
Missouri. Because the market for wheat is generally
considered to be competitive, Mr. McDonald maximizes
his profit by choosing
a. to produce the quantity at which average fixed cost is
minimized.
b. the quantity at which market price is equal to Mr.
McDonald's marginal cost of production.
c. to produce the quantity at which average variable cost is
minimized.
d. the quantity at which market price exceeds Mr.
McDonald's marginal cost of production by the greatest
amount. - ANSWER-the quantity at which market price is
equal to Mr. McDonald's marginal cost of production.
Which of the following statements is true?
a. Average revenue is the same as price for competitive
firms but not monopoly firms.
b. Average revenue is the same as price for monopoly
firms but not competitive firms.
c. When a monopoly firm sells an additional unit of output,
its revenue increases by an amount less than the price.
d. When a competitive firm sells an additional unit of
output, its revenue increases by an amount less than the
price. - ANSWER-When a monopoly firm sells an
WGU – C211 Objective Assessment Final Exam
2026/2027 – Global Economics and International Trade
Questions with Answers||Newest Exam!!!
If a firm uses labor to produce output, the firm's production
function depicts the relationship between
a. marginal product and marginal cost.
b. the maximum quantity that the firm can produce as it
adds more capital to a fixed quantity of labor.
c. fixed inputs and variable inputs in the short run.
d. the number of workers and the quantity of output. -
ANSWER-the number of workers and the quantity of
output.
Which of the following represents the firm's short-run
condition for shutting down?
a. Shut down if TR < FC
b. Shut down if TR < TC
c. Shut down if P < ATC
d. Shut down if TR < VC - ANSWER-d. Shut down if TR <
VC
If there is an increase in market demand in a perfectly
competitive market, then in the short run
,2|Page
a. profits will rise.
b. there will be no change in the demand curves faced by
individual firms in the market.
c. the demand curves facing firms will become more
elastic.
d. the demand curves facing firms will shift downward. -
ANSWER-profits will rise.
A competitive market is in long-run equilibrium. If demand
decreases, we can be certain that price will
a. fall in the short run. All firms will shut down, and some of
them will exit the industry. Price will then rise to reach the
new long-run equilibrium.
b. fall in the short run. All, some, or no firms will shut
down, and some of them will exit the industry. Price will
then rise to reach the new long-run equilibrium.
c. not fall in the short run because firms will exit to
maintain the price.
d. fall in the short run. No firms will shut down, but some of
them will exit the industry. Price will then rise to reach the
new long-run equilibrium. - ANSWER-fall in the short run.
All, some, or no firms will shut down, and some of them
will exit the industry. Price will then rise to reach the new
long-run equilibrium.
,3|Page
When firms are said to be price takers, it implies that if a
firm raises its price,
a. competitors will also raise their prices.
b. buyers will pay the higher price in the short run.
c. firms in the industry will exercise market power.
d. buyers will go elsewhere. - ANSWER-buyers will go
elsewhere.
If a firm in a perfectly competitive market triples the
quantity of output sold, then total revenue will
a. more than triple.
b. less than triple.
c. exactly triple.
d. be reduced by one third. - ANSWER-exactly triple.
Whenever a perfectly competitive firm chooses to change
its level of output, its marginal revenue
a. increases if MR < ATC and decreases if MR > ATC.
b. always decreases.
c. does not change.
d. always increases. - ANSWER-does not change.
, 4|Page
Farmer McDonald sells wheat to a broker in Kansas City,
Missouri. Because the market for wheat is generally
considered to be competitive, Mr. McDonald maximizes
his profit by choosing
a. to produce the quantity at which average fixed cost is
minimized.
b. the quantity at which market price is equal to Mr.
McDonald's marginal cost of production.
c. to produce the quantity at which average variable cost is
minimized.
d. the quantity at which market price exceeds Mr.
McDonald's marginal cost of production by the greatest
amount. - ANSWER-the quantity at which market price is
equal to Mr. McDonald's marginal cost of production.
Which of the following statements is true?
a. Average revenue is the same as price for competitive
firms but not monopoly firms.
b. Average revenue is the same as price for monopoly
firms but not competitive firms.
c. When a monopoly firm sells an additional unit of output,
its revenue increases by an amount less than the price.
d. When a competitive firm sells an additional unit of
output, its revenue increases by an amount less than the
price. - ANSWER-When a monopoly firm sells an
