WGU C211 OA Global Economics Exam
() Questions and Verified
Answers, 100% Guarantee Pass
In a competitive market, if the price of a good is above the equilibrium price, what is the
expected outcome?
A. Surplus leading to price increase
B. Shortage leading to price decrease
C. Surplus leading to price decrease
D. Shortage leading to price increase
Correct Answer: C
Rationale: When price exceeds equilibrium, quantity supplied surpasses quantity demanded,
creating a surplus that pressures sellers to lower prices to clear the market, restoring equilibrium
in line with 2025/2026 supply and demand principles.
How does an increase in consumer income affect the demand curve for a normal good?
A. Shifts leftward
B. Shifts rightward
C. Remains unchanged
D. Becomes vertical
Correct Answer: B
Rationale: Higher income boosts purchasing power, increasing demand at every price level,
shifting the curve rightward as per modern economic models emphasizing income effects.
What happens to the supply curve if production technology improves?
,A. Shifts leftward
B. Shifts rightward
C. Becomes steeper
D. Becomes flatter
Correct Answer: B
Rationale: Technological advancements reduce costs, enabling more output at each price, shifting
supply rightward in contemporary supply analysis.
In perfect competition, firms are described as:
A. Price makers with market power
B. Price takers with no market power
C. Oligopolists with barriers to entry
D. Monopolists with product differentiation
Correct Answer: B
Rationale: Numerous small firms accept market prices without influence, characteristic of perfect
competition in 2025/2026 market structure theories.
A monopoly maximizes profit by producing where:
A. Marginal revenue equals marginal cost
B. Average revenue equals average cost
C. Total revenue equals total cost
D. Price equals average cost
Correct Answer: A
Rationale: Monopolists equate MR and MC to optimize output, a core principle in monopoly
analysis.
, In an oligopoly, firms often engage in:
A. Perfect price competition
B. Strategic interdependence
C. Independent decision-making
D. Unlimited entry
Correct Answer: B
Rationale: Few firms anticipate rivals' reactions, leading to strategic behaviors like game theory
applications in modern oligopoly models.
Price elasticity of demand measures:
A. Change in quantity supplied relative to price
B. Responsiveness of quantity demanded to price changes
C. Total revenue changes
D. Income effects on supply
Correct Answer: B
Rationale: It quantifies demand sensitivity, crucial for pricing strategies in 2025/2026 elasticity
concepts.
If demand is inelastic, a price increase leads to:
A. Decreased total revenue
B. Increased total revenue
C. No change in revenue
D. Decreased quantity supplied
Correct Answer: B
() Questions and Verified
Answers, 100% Guarantee Pass
In a competitive market, if the price of a good is above the equilibrium price, what is the
expected outcome?
A. Surplus leading to price increase
B. Shortage leading to price decrease
C. Surplus leading to price decrease
D. Shortage leading to price increase
Correct Answer: C
Rationale: When price exceeds equilibrium, quantity supplied surpasses quantity demanded,
creating a surplus that pressures sellers to lower prices to clear the market, restoring equilibrium
in line with 2025/2026 supply and demand principles.
How does an increase in consumer income affect the demand curve for a normal good?
A. Shifts leftward
B. Shifts rightward
C. Remains unchanged
D. Becomes vertical
Correct Answer: B
Rationale: Higher income boosts purchasing power, increasing demand at every price level,
shifting the curve rightward as per modern economic models emphasizing income effects.
What happens to the supply curve if production technology improves?
,A. Shifts leftward
B. Shifts rightward
C. Becomes steeper
D. Becomes flatter
Correct Answer: B
Rationale: Technological advancements reduce costs, enabling more output at each price, shifting
supply rightward in contemporary supply analysis.
In perfect competition, firms are described as:
A. Price makers with market power
B. Price takers with no market power
C. Oligopolists with barriers to entry
D. Monopolists with product differentiation
Correct Answer: B
Rationale: Numerous small firms accept market prices without influence, characteristic of perfect
competition in 2025/2026 market structure theories.
A monopoly maximizes profit by producing where:
A. Marginal revenue equals marginal cost
B. Average revenue equals average cost
C. Total revenue equals total cost
D. Price equals average cost
Correct Answer: A
Rationale: Monopolists equate MR and MC to optimize output, a core principle in monopoly
analysis.
, In an oligopoly, firms often engage in:
A. Perfect price competition
B. Strategic interdependence
C. Independent decision-making
D. Unlimited entry
Correct Answer: B
Rationale: Few firms anticipate rivals' reactions, leading to strategic behaviors like game theory
applications in modern oligopoly models.
Price elasticity of demand measures:
A. Change in quantity supplied relative to price
B. Responsiveness of quantity demanded to price changes
C. Total revenue changes
D. Income effects on supply
Correct Answer: B
Rationale: It quantifies demand sensitivity, crucial for pricing strategies in 2025/2026 elasticity
concepts.
If demand is inelastic, a price increase leads to:
A. Decreased total revenue
B. Increased total revenue
C. No change in revenue
D. Decreased quantity supplied
Correct Answer: B
