WGU C211 OBJECTIVE ASSESSMENT GLOBAL
ECONOMICS FOR MANAGERS EXAM Q&A
2026 STUDY GUIDE
◉ Indifference Curve (IC). Answer: A curve that shows consumption
bundles that give the consumer the same level of satisfaction
◉ Marginal Rate of Substitution (MRS). Answer: The rate at which a
consumer is willing to trade one good for another
◉ Budget constraint. Answer: The limit on the consumption bundles
that a consumer can afford
◉ Budget constraint impact regarding an increase in income.
Answer: Additional bundles could be consumed with an increase in
income; the increase in income shifts the budget constraints
outward
◉ Marginal analysis. Answer: Analysis that involves comparing
marginal benefits and marginal costs
◉ Normal goods. Answer: Goods for which demand increases when
income increases
,◉ Inferior goods. Answer: Goods for which a consumer buys less of
when income rises
◉ Consumer's optimal point of consumption. Answer: The point at
which the consumer's indifference curve matches the slope of the
consumer's budget constraints; the highest point for budgetary
constraint
◉ Deadweight loss. Answer: The reduction in economic surplus
resulting from a market not being in competitive equilibrium
◉ Marginal cost calculation. Answer: The amount that total cost
rises when the firm increases production by 1 unit of output
◉ Marginal cost. Answer: The cost of producing one more unit of a
good
◉ Marginal cost's relation to total cost. Answer: The total cost
divided by the output in relation to fixed and variable costs
◉ Marginal cost formula. Answer: Change in total cost / Change in
quantity
, ◉ Total Cost Formula. Answer: Fixed cost + Variable cost
◉ Shut down. Answer: A short-run decision not to produce anything
during a specific period of time b/c of current market conditions
◉ Market exit. Answer: A decision by a company to leave a particular
market
◉ Price taker. Answer: A buyer or seller who cannot affect the
market price
◉ Perfectly competitive market. Answer: A market that meets the
conditions of (1) many buyers and sellers, (2) all firms selling
identical products, and (3) no barriers to new firms entering the
market
◉ Perfectly competitive market demand curve shape. Answer:
Horizontal line when a buyer's demand does not affect the price or
quantity demanded
◉ When price equals marginal cost. Answer: A price in which a
competitive firm maximizes profit by choosing the correct quantity
in reference to price
ECONOMICS FOR MANAGERS EXAM Q&A
2026 STUDY GUIDE
◉ Indifference Curve (IC). Answer: A curve that shows consumption
bundles that give the consumer the same level of satisfaction
◉ Marginal Rate of Substitution (MRS). Answer: The rate at which a
consumer is willing to trade one good for another
◉ Budget constraint. Answer: The limit on the consumption bundles
that a consumer can afford
◉ Budget constraint impact regarding an increase in income.
Answer: Additional bundles could be consumed with an increase in
income; the increase in income shifts the budget constraints
outward
◉ Marginal analysis. Answer: Analysis that involves comparing
marginal benefits and marginal costs
◉ Normal goods. Answer: Goods for which demand increases when
income increases
,◉ Inferior goods. Answer: Goods for which a consumer buys less of
when income rises
◉ Consumer's optimal point of consumption. Answer: The point at
which the consumer's indifference curve matches the slope of the
consumer's budget constraints; the highest point for budgetary
constraint
◉ Deadweight loss. Answer: The reduction in economic surplus
resulting from a market not being in competitive equilibrium
◉ Marginal cost calculation. Answer: The amount that total cost
rises when the firm increases production by 1 unit of output
◉ Marginal cost. Answer: The cost of producing one more unit of a
good
◉ Marginal cost's relation to total cost. Answer: The total cost
divided by the output in relation to fixed and variable costs
◉ Marginal cost formula. Answer: Change in total cost / Change in
quantity
, ◉ Total Cost Formula. Answer: Fixed cost + Variable cost
◉ Shut down. Answer: A short-run decision not to produce anything
during a specific period of time b/c of current market conditions
◉ Market exit. Answer: A decision by a company to leave a particular
market
◉ Price taker. Answer: A buyer or seller who cannot affect the
market price
◉ Perfectly competitive market. Answer: A market that meets the
conditions of (1) many buyers and sellers, (2) all firms selling
identical products, and (3) no barriers to new firms entering the
market
◉ Perfectly competitive market demand curve shape. Answer:
Horizontal line when a buyer's demand does not affect the price or
quantity demanded
◉ When price equals marginal cost. Answer: A price in which a
competitive firm maximizes profit by choosing the correct quantity
in reference to price
