Producers and Demand Quiz

Consider two producers, Producer A and Producer B, who can produce two goods: wheat and cloth. Producer A produces 40 wheat and 20 cloth and Producer B produces 30 wheat and 30 cloth.  

Which producer has the absolute advantage in producing wheat?

• Producer A

• Producer B

• Both producers have the same advantage

• Neither producer has an advantage

Consider two producers, Producer A and Producer B, who can produce two goods: wheat and cloth. Producer A produces 40 wheat and 20 cloth and Producer B produces 30 wheat and 30 cloth.  

Which producer has the absolute advantage in producing cloth?

• Producer A

• Producer B

• Both producers have the same advantage

• Neither producer has an advantage

Consider two producers, Producer A and Producer B, who can produce two goods: wheat and cloth. Producer A produces 40 wheat and 20 cloth and Producer B produces 30 wheat and 30 cloth.  

Which producer has the comparative advantage in producing wheat?

• Producer A

• Producer B

• Both producers have the same advantage

• Neither producer has an advantage

Consider two producers, Producer A and Producer B, who can produce two goods: wheat and cloth. Producer A produces 40 wheat and 20 cloth and Producer B produces 30 wheat and 30 cloth.  

Which producer has the comparative advantage in producing cloth?

• Producer A

• Producer B

• Both producers have the same advantage

• Neither producer has an advantage

What does a point inside the Production Possibility Frontier (PPF) represent?

• Efficient production

• Unattainable production with current resources

• Inefficient use of resources

• Maximum production capacity

If the PPF shifts outward, what does this indicate?

• A decrease in available resources

• Technological improvement or Economic growth

• A decrease in consumer demand

• Economic recession

What is the law of demand?

• ceteris paribus, As the price of a good increases, the quantity demanded increases.

• ceteris paribus, As the price of a good decreases, the quantity demanded increases.

• ceteris paribus, Demand is unrelated to price changes.

• ceteris paribus, The quantity demanded remains constant regardless of price.

Which of the following would cause a movement along the demand curve for a product?

• An increase in consumer income

• A change in consumer preferences

• A decrease in the price of the product itself

• A change in the price of a substitute good

What happens to the demand for a normal good when consumer income rises?

• The demand curve shifts to the left.

• The demand curve shifts to the right.

• There is no effect on the demand curve.

• The demand curve remains the same but quantity demanded decreases.

What type of good is it when an increase in income leads to a decrease in the demand for that good?

• Normal good

• Luxury good

• Inferior good

• Substitute good