Question

1. A change in tastes will do which of the following?

a. Shift the demand curve to the right

b. Result in healthier choices

c. Lead to more uniform goods being produced

d. Shift the demand curve

2. What are complementary goods?

a. Complements are goods for which an increase in the price of one of the goods results in a decrease in the demand for the other.

b. Complements are goods for which an increase in the price of one of the goods results in an increase in the demand for that good.

c. Complements are goods for which a decrease in the price of one of the goods results in a decrease in the demand for both goods.

d. Complements are goods where each is the substitute for the other.

3. For two goods, chicken and tomatoes, producers have a comparative advantage in one good or the other. As the output of chicken expands, producers with a _______ comparative advantage in tomatoes will switch from tomatoes, and the opportunity cost of chicken will ______.

a. greater; increase

b. greater; decrease

c. lesser; increase

d. lesser; decrease

4. If there is an improvement in production technology for a good, what would we expect to see?

a. An increase in supply

b. An increase in quantity supplied

c. A decrease in supply

d. A decrease in quantity supplied

Answer 1

1. Option d. Change in tastes and preferences would lead to shift in demand to right or left

2. Option a. Complementary goods are those goods whose demand increases for increase in demand of other good

3. Option d. Comparative advantage arises when the opportunity cost decreases

4. Option a. Technological advancements increases productivity and hence the supply curve shifts right