WGU C211 Exam 2023- Global Economics
for Managers/ 57 Questions and
Answers/ Graded A.
***What Political views exist on Foreign Direct Investment (FDI)*** - -***answer
includes radicalism***
Radical View - Hostile to foreign direct investment (FD)
Free Market View - Suggests foreign direct investment (FDI) unrestricted by
government intervention is the best.
Pragmatic Nationalism - Only approves foreign direct investment (FDI) when its
benefits outweigh its costs.
-***What is Resource similarity*** - -The extent to which a given competitor possesses
strategic endowment comparable, in terms of both type & amount, to those of the focal
firm.
-***How are supply and demand related to the exchange rate of a country?*** - -The
price of a commodity, a country's currency, is fundamentally determined by this. Strong
demand leads to price hikes; oversupply results in price drops.
-***What advantages exist with First-mover?*** - -
1. Proprietary, technological leadership
2. Pre-emption of scarce resources
3. Establishment of entry barriers for late entrants
4. Avoidance of clash with dominant firms at home
5. Relationships with key stakeholders such as governments
-***How is global business affected by democracy?*** - -An individual's right to
freedom of expression and organization. For example, starting up a firm is an act of
economic expression
-***How is global business affected by totalitarianism?*** - -These countries often
experience wars, riots, protests, chaos, & breakdowns, which result in higher political
risk.
-***Democracy*** - -Citizens elect representatives to govern the country on their
behalf.
Right to freedom of expression and organization.
-***Totalitarianism*** - -One person or party exercises absolute political control over
the population.
, -***What is Property right?*** - -The legal rights to use an economic resource & to
derive income & benefits from it.
-***Intellectual property is a right of?*** - -right of ownership/right to derive income
from it
-***Market economy*** - -Characterized by the "invisible hand" of market forces-all
factors of production should be privately owned.
-***Command economy*** - -Defined by a government taking all factors of production
to be government-owned or state-owned, & all supply, demand, & pricing are planned
by the government.
-***Mixed economy*** - -An economy that has elements of both a market economy & a
command economy.
It boils down to the relative distribution of market forces versus command forces.
-***What is an Indifference curve used for*** - -A curve that shows consumption
bundles that give the consumer the same level of satisfaction
(i.e. combinations of pizza & Pepsi with which the consumer is equally satisfied.)
-***Competitive demand curve*** - -horizontal demand curve
-***Monopolist demand curve*** - -downward sloping demand curve
-***Describe the basic distinctions between the market models with respect to:
1. number of market participants
2. type of product being marketed
*ease of entry/exit into the market
*the prevalence of advertising/marketing*** - -1. Monopoly (1 firm - cable tv)
Oligopoly (few firms - cigarettes)
*entry is difficult & advertising is a natural feature.
2. Monopolistic competition many firms, diff products (movies)
Perfect competition many firms, identical products (milk)
*entry is easy & spend very little on advertising.
-***What Fundamental truth realized when studying the behavior of an oligopolistic
firm within the context/model called "prisoner's dilemma"*** - -***look for cooperative
in the answer***
self-interest makes it difficult for the oligopolists to maintain cooperative outcome.
Relentless logic of self-interest drives participants toward the non-cooperative outcome,
which is worse for both parties.
Each oligopolist has an incentive to cheat. Just as self-interest drives the prisoners in
the prisoners' dilemma to confess, self-interest makes it difficult for the oligopolists to
maintain the cooperative outcome with low production, high prices, & monopoly profits.
for Managers/ 57 Questions and
Answers/ Graded A.
***What Political views exist on Foreign Direct Investment (FDI)*** - -***answer
includes radicalism***
Radical View - Hostile to foreign direct investment (FD)
Free Market View - Suggests foreign direct investment (FDI) unrestricted by
government intervention is the best.
Pragmatic Nationalism - Only approves foreign direct investment (FDI) when its
benefits outweigh its costs.
-***What is Resource similarity*** - -The extent to which a given competitor possesses
strategic endowment comparable, in terms of both type & amount, to those of the focal
firm.
-***How are supply and demand related to the exchange rate of a country?*** - -The
price of a commodity, a country's currency, is fundamentally determined by this. Strong
demand leads to price hikes; oversupply results in price drops.
-***What advantages exist with First-mover?*** - -
1. Proprietary, technological leadership
2. Pre-emption of scarce resources
3. Establishment of entry barriers for late entrants
4. Avoidance of clash with dominant firms at home
5. Relationships with key stakeholders such as governments
-***How is global business affected by democracy?*** - -An individual's right to
freedom of expression and organization. For example, starting up a firm is an act of
economic expression
-***How is global business affected by totalitarianism?*** - -These countries often
experience wars, riots, protests, chaos, & breakdowns, which result in higher political
risk.
-***Democracy*** - -Citizens elect representatives to govern the country on their
behalf.
Right to freedom of expression and organization.
-***Totalitarianism*** - -One person or party exercises absolute political control over
the population.
, -***What is Property right?*** - -The legal rights to use an economic resource & to
derive income & benefits from it.
-***Intellectual property is a right of?*** - -right of ownership/right to derive income
from it
-***Market economy*** - -Characterized by the "invisible hand" of market forces-all
factors of production should be privately owned.
-***Command economy*** - -Defined by a government taking all factors of production
to be government-owned or state-owned, & all supply, demand, & pricing are planned
by the government.
-***Mixed economy*** - -An economy that has elements of both a market economy & a
command economy.
It boils down to the relative distribution of market forces versus command forces.
-***What is an Indifference curve used for*** - -A curve that shows consumption
bundles that give the consumer the same level of satisfaction
(i.e. combinations of pizza & Pepsi with which the consumer is equally satisfied.)
-***Competitive demand curve*** - -horizontal demand curve
-***Monopolist demand curve*** - -downward sloping demand curve
-***Describe the basic distinctions between the market models with respect to:
1. number of market participants
2. type of product being marketed
*ease of entry/exit into the market
*the prevalence of advertising/marketing*** - -1. Monopoly (1 firm - cable tv)
Oligopoly (few firms - cigarettes)
*entry is difficult & advertising is a natural feature.
2. Monopolistic competition many firms, diff products (movies)
Perfect competition many firms, identical products (milk)
*entry is easy & spend very little on advertising.
-***What Fundamental truth realized when studying the behavior of an oligopolistic
firm within the context/model called "prisoner's dilemma"*** - -***look for cooperative
in the answer***
self-interest makes it difficult for the oligopolists to maintain cooperative outcome.
Relentless logic of self-interest drives participants toward the non-cooperative outcome,
which is worse for both parties.
Each oligopolist has an incentive to cheat. Just as self-interest drives the prisoners in
the prisoners' dilemma to confess, self-interest makes it difficult for the oligopolists to
maintain the cooperative outcome with low production, high prices, & monopoly profits.
