WGU C211 Objective Assessment Global
Economics Exam () Questions
and Verified Answers, 100% Guarantee
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1. Suppose that the United States imposes a tariff on avocados
imported from Mexico. What impact will this have on the price
paid for avocados by United States citizens?: The price will
increase.
2. Which of the following is a consequence of a country imposing
a tariff on imported goods?: The demand for foreign produced
goods decreases.
3. Suppose that the United States imposes a tariff on salt. What
impact might this tariff have on the price for domestic
consumers?: Consumers will pay a higher price.
4. Applying a tariff to coconuts will have the following effect::
Increase the domestic price of coconuts.
5. Which of the following is NOT a restriction to trade?: Free
trade areas.
6. What is the significant difference between an import quota and
a tariff?: A tariff raises revenue for the government and an import
quota creates surplus for those who obtain licenses to import.
7. Suppose that the price of a good increases (all else held
constant). Which of the following would happen along with the
change in price?: Consumer surplus would decrease.
8. Suppose that Bob goes to the market and is willing to pay $500
for a new chainsaw. Bob is able to find the chainsaw for only
$400. Which of the following follows from Bob's
circumstance?: His consumer surplus is $100.
9. Which statement is true of consumer surplus?: Consumer
surplus represents value to buyers in excess of the price paid for
the product.
10. Which statement is true?: Total surplus is the sum of consumer
and producer surplus and is graphically represented as the area
between the supply and demand curves up to the equilibrium
quantity.
11. Suppose that Bob lives in the United States,but has been working in Mexico for the
last 5 years. Where is the value of Bob's production counted during the last 5
years?: U.S. GNP and Mexico's GDP.
,12. Which of the following statements describes gross domestic
product (GDP)?: GDP is the most used measure of a country's
economic wellbeing.
13. Which of the following is an investment included in the gross
domestic product (GDP) measure?: Spending on new residential
construction.
14. Gross Domestic Product (GDP) measures which of the
following?: Market value of final goods and services produced
within a country in a given period of time.
15. Which item is NOT part of GDP?: Purchasing a used hairdryer.
16. What is the key distinction between real and nominal
GDP?: Real GDP measures production not affected by changes in
prices while nominal GDP measures production measured at
current prices.
17. What is the change in total cost equal to in the
marginal cost equation?: Marginal cost multiplied by change
in quantity.
18. Fixed costs equal:: Total costs minus variable costs
19. Economic profit is distinct from accounting profit
because:: Economic profit incorporates both explicit and
implicit costs.
20. Total costs include:: Variable costs plus fixed costs.
21. Marginal costs consider:: The increase in total cost arising from an extra unit of
production.
22. What response best describes the relationship between marginal costs and
total costs?: Whenever marginal cost is less than average total cost, average total
cost is falling.
23. Which statement is true about productivity?: The value of marginal product of
labor equals wage in a competitive firm.
24. A production function expresses the relationship between:: Quantity of resource
inputs and product/service outputs.
25. Opportunity costs include:: The income the entrepreneur could have earned
working for an employer.
26 Economists and decision makers study and then
make decisions or judgments based on (select best
answer):: Marginal analysis.
27. The primary reason that the marginal cost curve declines and then increases
is:: Firms experience increasing marginal product, then diminishing marginal
, .
product. 28. Which of the following statements is accurate?: Marginal costs
eventually rise with the quantity of output.
29. Consider the following example: A perfectly competitive
firm finds that at current production levels marginal cost is
greater than marginal revenue. What action should this firm
take in order to pursue the maximization of profit?: Decrease
the target output.
30. A competitive firm is characterized by:: Trading of
identical products.
31. Competitive firms experience marginal revenue that is::
Equal to price.
32. In the short-run, a competitive firm would
continue to produce under the following
circumstance:: Total revenue exceeds total variable costs.
33. What fundamental shape does a demand curve
take in a competitive market?: Horizontal. 34. For a
perfectly competitive firm which condition is true?:
The demand curve is the same as the marginal revenue
curve.
35. Which condition is true for perfectly competitive
firms in the long-run?: They will exit the market if total
revenue is less than total costs.
36. Which statement is true concerning marginal costs?:
Marginal costs typically decline and then increase with the
quantity of output.
37. What rule is used by perfectly competitive firms to
determine shut-down in the shortrun?: Price is less than
average variable costs.
38. What is true of perfectly competitive firms in the
long-run?: Economic profits will not be achievable.
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