Page 1 of 127
WGU C211 OA Exam — Global Economics for Managers EXAM
QUESTIONS AND CORRECT VERIFIED SOLUTIONS LATEST
UPDATE THIS YEAR – JUST RELEASED
WGU C211 OA Exam — Global Economics for Managers
Exam Coverage — 10 Key Points
1. Microeconomic principles and how managers use economic reasoning to make business
decisions.
2. Supply, demand, equilibrium, shortages, surpluses, and changes in market conditions.
3. Elasticity of demand and supply and its applications to pricing and revenue decisions.
4. Production, costs, economies of scale, productivity, and efficiency.
5. Market structures, including perfect competition, monopolistic competition, oligopoly,
and monopoly.
6. Macroeconomic indicators, including GDP, unemployment, inflation, and economic
growth.
7. Aggregate demand, aggregate supply, business cycles, and macroeconomic stabilization.
8. Money, banking, interest rates, monetary policy, and fiscal policy.
9. International trade, comparative advantage, exchange rates, trade restrictions, and
globalization.
10. Economic competitiveness, productivity, growth, and applying economic indicators to
managerial decisions.
1.
A manager notices that consumers purchase substantially more coffee after the price falls by 10
percent. Which economic concept best explains this relationship?
A. Supply
B. Demand
, Page 2 of 127
C. Productivity
D. Comparative advantage
Answer: B
Rationale: Demand describes the relationship between a product's price and the quantity
consumers are willing and able to purchase.
2.
A company's product currently sells above the market equilibrium price, causing unsold
inventory to accumulate. What condition does this situation represent?
A. Shortage
B. Surplus
C. Equilibrium
D. Inflation
Answer: B
Rationale: A price above equilibrium creates excess quantity supplied relative to quantity
demanded, producing a surplus.
3.
A manager observes that consumers purchase fewer units whenever the product's price
increases, assuming other factors remain unchanged. Which principle applies?
, Page 3 of 127
A. Law of demand
B. Law of supply
C. Law of diminishing returns
D. Comparative advantage
Answer: A
Rationale: The law of demand states that quantity demanded generally decreases as price
increases, ceteris paribus.
4.
A company experiences increased production costs because a major supplier raises the price of
essential raw materials. What happens to supply?
A. Supply increases
B. Supply decreases
C. Demand increases
D. Demand becomes perfectly elastic
Answer: B
Rationale: Higher input costs make production less profitable at existing prices, shifting the
supply curve leftward.
5.
A consumer's income increases substantially, causing demand for a normal good to increase.
What happens to the demand curve?
, Page 4 of 127
A. It shifts right
B. It shifts left
C. It becomes vertical
D. It becomes horizontal
Answer: A
Rationale: For a normal good, higher income increases demand, shifting the demand curve to
the right.
6.
A business sells a product whose demand decreases when consumers experience rising
incomes. What type of product is this?
A. Normal good
B. Inferior good
C. Luxury complement
D. Public good
Answer: B
Rationale: Demand for an inferior good generally falls as consumer income rises.
7.
A company raises its product price and observes that total revenue increases significantly
afterward. What does this suggest about demand?
WGU C211 OA Exam — Global Economics for Managers EXAM
QUESTIONS AND CORRECT VERIFIED SOLUTIONS LATEST
UPDATE THIS YEAR – JUST RELEASED
WGU C211 OA Exam — Global Economics for Managers
Exam Coverage — 10 Key Points
1. Microeconomic principles and how managers use economic reasoning to make business
decisions.
2. Supply, demand, equilibrium, shortages, surpluses, and changes in market conditions.
3. Elasticity of demand and supply and its applications to pricing and revenue decisions.
4. Production, costs, economies of scale, productivity, and efficiency.
5. Market structures, including perfect competition, monopolistic competition, oligopoly,
and monopoly.
6. Macroeconomic indicators, including GDP, unemployment, inflation, and economic
growth.
7. Aggregate demand, aggregate supply, business cycles, and macroeconomic stabilization.
8. Money, banking, interest rates, monetary policy, and fiscal policy.
9. International trade, comparative advantage, exchange rates, trade restrictions, and
globalization.
10. Economic competitiveness, productivity, growth, and applying economic indicators to
managerial decisions.
1.
A manager notices that consumers purchase substantially more coffee after the price falls by 10
percent. Which economic concept best explains this relationship?
A. Supply
B. Demand
, Page 2 of 127
C. Productivity
D. Comparative advantage
Answer: B
Rationale: Demand describes the relationship between a product's price and the quantity
consumers are willing and able to purchase.
2.
A company's product currently sells above the market equilibrium price, causing unsold
inventory to accumulate. What condition does this situation represent?
A. Shortage
B. Surplus
C. Equilibrium
D. Inflation
Answer: B
Rationale: A price above equilibrium creates excess quantity supplied relative to quantity
demanded, producing a surplus.
3.
A manager observes that consumers purchase fewer units whenever the product's price
increases, assuming other factors remain unchanged. Which principle applies?
, Page 3 of 127
A. Law of demand
B. Law of supply
C. Law of diminishing returns
D. Comparative advantage
Answer: A
Rationale: The law of demand states that quantity demanded generally decreases as price
increases, ceteris paribus.
4.
A company experiences increased production costs because a major supplier raises the price of
essential raw materials. What happens to supply?
A. Supply increases
B. Supply decreases
C. Demand increases
D. Demand becomes perfectly elastic
Answer: B
Rationale: Higher input costs make production less profitable at existing prices, shifting the
supply curve leftward.
5.
A consumer's income increases substantially, causing demand for a normal good to increase.
What happens to the demand curve?
, Page 4 of 127
A. It shifts right
B. It shifts left
C. It becomes vertical
D. It becomes horizontal
Answer: A
Rationale: For a normal good, higher income increases demand, shifting the demand curve to
the right.
6.
A business sells a product whose demand decreases when consumers experience rising
incomes. What type of product is this?
A. Normal good
B. Inferior good
C. Luxury complement
D. Public good
Answer: B
Rationale: Demand for an inferior good generally falls as consumer income rises.
7.
A company raises its product price and observes that total revenue increases significantly
afterward. What does this suggest about demand?
