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WGU Global Economics for Managers (C211, UZC2) Sample Questions:

1. When producing a piece of luggage, the marginal cost is $92 and the marginal revenue is $81. What is the best action for the firm?

A) Restart production
B) Enter the market
C) Increase production
D) Decrease production

2. A country has experienced a decrease in inflation. What is the effect on the country's currency exchange rate?

A) It increases
B) It becomes unstable
C) It depreciates
D) It has no effect

3. Managers and firms rationally pursue their interests and make choices within institutional constraints. This is one of the two core propositions underpinning an institution-based view of global business. Which situation illustrates this proposition?

A) When a company opens a new production facility, company leaders find out that the laws of that country may allow it to skip several important safety steps. In doing so, the cost of production goes down, but there is a risk to the surrounding environment. The leaders decide not to skip these safety steps out of a deep concern and commitment to environmental protection.
B) Two failing banks are pursuing the option of being acquired by another institution. One bank is able to leverage political relationships to result in a successful acquisition. The other bank pursues no such political solution and eventually files for bankruptcy.
C) Government corruption is rampant in a particular country, leading to a high cost of doing business.However, some smaller companies have figured out how to legally evade the most fraudulent abuses, and for them the cost of doing business becomes much cheaper. For this reason, the companies stay and have a lucrative decade.
D) Several businesses relocate overseas because of a new domestic tax policy that will increase their tax liability by 15%.

4. What is opportunity cost?

A) The lost potential from pursuing one activity at the expense of another, given the alternatives
B) The explicit monetary cost of an activity
C) The marginal benefit of an additional unit
D) The total cost of all inputs used in production

5. Which statement about the GDP deflator is true?

A) It follows a nearly strict decreasing pattern from a base year.
B) Its percentage change from one year to the next is the inflation rate.
C) It is a more reliable indicator of economic well-being than real GDP.
D) It includes fewer core economic measurements than GDP.

Solutions: