1. Change in quantity demanded vs. change in demand

2. Changes in demand can fall into two categories: 1) A change in the quantity demanded – change in demand specifically due to price. (i.e. law of demand). 2) A change in demand – a change in demand caused by any factor other than price.

3. A. Change in the Quantity Demanded Law of Demand: Creates a movement ALONG the demand curve that shows a change in the quantity of the product purchased in response to a change in price. P Q Ex) As the price of iPhones decrease, the quantity demanded will increase.

4. Market Demand Schedule Price of Jeans Quantity of Jeans demanded $2000 18050 16075 140120 150 100200

5. B. Change in Demand Change in demand creates a situation where people are now willing to buy different amounts of a product at the same prices. Ex) The price of a t-shirt is $20. Tammy earned a raise at her job, so she is now able to buy more t-shirts (8) for the same price (demand shifts right). Increase in demand= curve shifts rightward/upward Decrease in demand= curve shifts to leftward/downward

6. Reasons why demand changes: 1.Change in Consumer Income As income rises, consumers can buy more products at each and every price. 2. Change in Tastes and Preferences Advertising, news reports, trends, and seasons can affect if people would pay for more products at each and every price.

7. 3. Change in the Price of a Substitute or Complementary good Substitutes: Ex) Butter and margarine. An increase in the price of butter could cause the demand for margarine to increase. Complements: Ex) Film and cameras. As camera prices decrease, more cameras will be sold, and therefore demand for film will increase. 4. Change in Expectations 5. Change in the Population

8. The graph is depicting the price and quantity of cheeseburgers. If the President gave each citizen a stimulus check for $500, this would increase the demand for cheeseburgers. The increased demand would increase the equilibrium price to $4 and the equilibrium quantity to 40 cheeseburgers.

9. Graphed item is Snowboard Boots If the price of snowboards increased, the demand for snowboard boots would decrease. Equ. Price and quantity would both decrease. Snowboards and boots are known as “complements.”