04 Jun uestion Quiz #2 (Lec 004) 1. The demand for a good or service is determined by
uestion
Quiz #2 (Lec 004)
1. The demand for a good or service is determined by
a. Those who buy the good or service.
b. The government.
c. The producers who create the good or service.
d. Those who supply the raw materials used in the production of the good or service.
2. Which of the following is not held constant in defining the demand schedule?
a. income
b. prices of related goods
c. preferences
d. price of the good itself
e. number of consumers
3. The price of good A rises, and the demand curve for good B shifts leftward. We can conclude that
a. A and B are complements.
b. B is a normal good.
c. B is an inferior good.
d. A and B are substitutes.
e. A and B are complements in production.
4. An increase in the price of ground beef will
a. Increase the demand for chicken, a substitute for beef.
b. Increase the demand for hamburger buns, a complement for beef.
c. Increase the quantity demanded of ground beef.
d. Decrease the quantity demanded of ground beef.
e. Both A and D.
5. Which one of the following events shifts the demand curve for grape jelly to the right?
a. an increase in income if grape jelly is a normal good
b. a decrease in the price of strawberry preserves, a substitute for grape jelly
c. a decrease in the price of grape jelly
d. a decrease in the population
e. an increase in the price of peanut butter, a complement of grape jelly
6. If a large percentage drop in the price level causes a small percentage increase in the quantity demanded,
a. demand is inelastic.
b. demand is elastic.
c. demand is unit elastic.
d. the price elasticity of demand is close to infinity
7. In one hour, Sue can produce 50 caps or 10 jackets and Tessa can produce 70 caps or 7 jackets. Sue’s opportunity cost of producing a cap is ________ jackets and Tessa’s opportunity cost of producing a cap is ________ jackets. ________ has a comparative advantage in producing caps. If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 7 caps, ________.
a. 0.2; 0.10; Sue; both Sue and Tessa gain
b. 0.2; 0.10; Sue; Tessa gains but Sue loses
c. 0.2; 0.10; Tessa; both Sue and Tessa gain
d. 5.0; 10.0; Tessa; Sue loses but Tessa gains
e. 5.0; 10.0; Sue; both Sue and Tessa gain
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