While German is less strict about the use of distal and proximal demonstrative pronouns, one should still keep in mind that this is better translated by dies / das hier and das / das dort / jenes by that.
While in this conversation both question and answer could be honest, it seems like the second person is mocking the first one, because he/she was not paying attention and so asks the question. At least in my lang it would likely be so
This sentence made me smile. It may not be exactly "useful" (if that is a consideration that can ever be applied to Duolingo phrases ;)), but this is atually super idiomatic in German. :D