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WGU Certification
Global-Economics-for-Managers Exam
WGU.Global-Economics-for-Managers.v2026-08-17.q51 Dumps

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Question 41

What are features shared by monopolies and perfect competition? (Choose TWO.)

A.In the long run, new firms can easily enter the market.
B.In the long run, it is nearly impossible for new firms to enter.
C.The structure does not produce the welfare-maximizing level of output.
D.Price is greater than marginal cost.
E.Maximum profit occurs when marginal revenue equals marginal cost.
F.Firms earn economic profits in the short run.

Correct Answer: E,F

In Global Economics for Managers , monopolies and perfectly competitive firms share two important features: profit maximization at MR = MC and the ability to earn economic profits in the short run , making options E and F correct.
Option E applies universally: all firms maximize profit where marginal revenue equals marginal cost , regardless of market structure. This decision rule guides output choices in both monopoly and perfect competition.
Option F is also correct because firms in both structures can earn economic profits in the short run . In perfect competition, short-run profits attract new entrants, while monopolies may sustain profits longer due to entry barriers.
Options A and B distinguish the two structures. Option C applies only to monopoly. Option D applies only to monopoly, not perfect competition.
Thus, options E and F correctly identify shared features.

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Question 42

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

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

Correct Answer: C

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Question 43

When is it best for a firm to decrease production?

A.When marginal cost is greater than marginal revenue.
B.When total revenue is greater than total cost.
C.When the average variable cost is less than the price of a unit after a short-term stop.
D.When the price of a unit covers the average variable cost after a short-term stop.

Correct Answer: A

A firm should decrease production when marginal cost is greater than marginal revenue. Option A is correct because each additional unit costs more to produce than it brings in revenue, which reduces profit. The standard profit-maximizing rule is to produce where marginal revenue equals marginal cost. If marginal cost exceeds marginal revenue, output is too high and the firm should reduce production. Option B does not justify decreasing production because total revenue greater than total cost indicates profit. Options C and D describe conditions under which restarting or continuing production may be reasonable because price covers average variable cost. The question is about marginal decision making, not total profitability or shutdown rules. For managers, the key rule is simple: do not produce units that reduce profit.

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Question 44

Which quantity measures the market value of all final goods and services produced within a country in a given period of time?

A.Gross national income (GNI)
B.Net domestic product (NDP)
C.Gross domestic product (GDP)
D.National disposable income

Correct Answer: C

InGlobal Economics for Managers,gross domestic product (GDP)is defined asthe market value of all final goods and services produced within a country's borders during a specific period, making option C correct. GDP is the most widely used indicator of a country's economic performance and size.
GDP includes onlyfinal goods and servicesto avoid double counting. Intermediate goods used in production are excluded because their value is already embedded in final goods. GDP also measures productionwithin national borders, regardless of whether the producers are domestic or foreign-owned firms.
Option A, GNI, includes income earned by citizens abroad and excludes income earned domestically by foreign firms. Option B subtracts depreciation from GDP. Option D is not a standard national income measure.
Managers use GDP to evaluate market potential, economic growth, and country risk. Therefore, option C correctly identifies GDP.

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Question 45

What is a characteristic of a market economy?

A.It is in place in most of the world's countries.
B.It gives the government the primary authoritative role in the economy.
C.It leaves the planning of supply, demand, and pricing to the government.
D.It emphasizes private ownership of all factors of production.

Correct Answer: D

A market economy emphasizes private ownership of the factors of production and relies on decentralized decision making by consumers and firms. Option D is correct because private ownership is one of the defining features of market-based systems. In a market economy, prices are primarily determined by supply and demand rather than direct government planning. Firms decide what to produce based on profitability, and consumers decide what to buy based on preferences and income. Option B describes a command economy, where government has the primary authoritative role. Option C is also command-economy logic because supply, demand, and pricing are centrally planned. Option A is too broad and inaccurate because most real- world economies are mixed economies, not pure market economies.

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