Econ 201, Douglas
Fall 2006
QUIZ 2
PLEDGE: I have neither given nor received unauthorized help on this quiz.
SIGNED_____________________________PRINT NAME_____________________________
Labor Hours needed to make one unit of:
Perfume
Cloth
(bottles) (yards)
Nancy
6
9
Roger
4
5
___ 1. Refer to the table shown. The opportunity cost of 1 bottle of perfume for Nancy is
a.
b.
c.
d.
3/2 yards of cloth.
2/3 yard of cloth.
5/6 yard of cloth.
8/9 yard of cloth.
___ 2. Roger has comparative advantage in __________ and Nancy has comparative advantage in
a.
b.
c.
d.
__________.
both goods, neither good
cloth, perfume
cloth, neither good
perfume, cloth
___ 3. Nancy and Roger both could benefit if Roger specializes in producing __________ and Nancy
a.
b.
c.
d.
specializes in producing __________ , and they trade with each other.
either good, cloth
perfume, cloth
cloth, perfume
Nancy can benefit from trade, Roger can not.
___ 4. If the price of perfume rises from $20 to $40 per bottle, ceteris paribus
a.
b.
c.
d.
the supply of perfume will increase.
the quantity supplied of perfume will decrease, but the supply of perfume will remain constant.
the supply of perfume will decrease.
the quantity supplied of perfume will increase, but the supply of perfume will remain constant.
___ 5. If the price of buttons (a complement for cloth), increases, then
a. the demand for cloth will increase.
b. the demand for cloth will decrease.
c. the demand buttons will decrease.
d. the demand for cloth will not change, but the quantity demanded of cloth will increase.
___ 6. An increase in the price of buttons would be expected to
a. increase the quantity of cloth sold.
b. decrease the quantity of cloth sold.
c. increase the price of cloth.
d. decrease the price of dresses that are made using those buttons.
___ 7. A dress manufacturer finds out the price of dresses will rise in the near future. Because of this,
a. the dress manufacturer will increase his supply of dresses now.
b. the demand for this manufacturer’s dresses will fall now.
c. the dress manufacturer will decrease his supply of dresses now.
d. the current price for this manufacturer’s dresses will fall.
Econ 201, Douglas
QUIZ 2 ANSWERS:
1.
B
2.
B
3.
C
4.
D
5.
B
6.
B
7.
C
Fall 2006