Demand Worksheet

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PRACTICING DEMAND

1. The law of demand states- when the price increases, the quantity demanded will ___________.
When the price decreases, the quantity demanded will _______________.

2. If a change in price has an effect on the change in quantity, this is known as (elastic / inelastic)
demand. Give a specific example of this type of demand.

3. If the federal government says that fish is healthy for you, the demand for fish will
(increase / decrease). Which determinant of demand causes this change? _____________________
Which way will the demand curve shift? (left / right) Draw the new demand curve- Label it D1.
P

D
Q

4. Economists announce that the unemployment rate will increase over the next six months.
The demand for new homes will (increase / decrease). Which determinant causes this change?
_____________________. Which way will the demand curve shift? (left / right) Draw the new
demand curve- Label it D2

D
Q

5. The price of syrup increases, the demand for pancakes will (increase / decrease).
Which determinant causes this change? _________________________.
Which way will the demand curve shift? (left / right) Draw the new demand curve- Label it D3.

D
Q

6. The price of airline tickets goes up, the demand for train tickets will (increase / decrease).
Which determinant causes this change? ___________________________ Which way will the
demand curve shift? (left / right) Draw the new demand curve-Label it D4.
P

D
Q

7. Provide a complement for the following items:


car- __________________ bread-__________________ shoes-_______________
8. Provide a substitute for the following items:

car-___________________ pen-____________________ television-____________

9. Plot the points for the demand curve and label the line D1.

Demand Schedule #1
Price Quantity P
$9.00 1
$6.00 3
$5.00 4
$2.00 6
$1.00 7

Demand Schedule #2
Price Quantity
$9.00 3
$8.00 4 Use the graph above, plot the points for the new demand curve and
$5.00 6 label it D2
$4.00 7
$1.00 9

10. Does a shift from D1 to D2 reflect an increase or a decrease in demand? _________________


Identifying the determinants of demand. You have seen have how an increase in demand is
depicted on a graph by a shift in the demand curve.
• When the demand curve shifts upward and to the right, this is indicative of an increase in
demand.
• When the demand curve shifts to the left, this is indicative of a decrease in demand.
• Factors that result in a change in demand are the determinants of demand.

Complete the table below. For each determinant of demand:


• indicate whether demand will increase or decrease;
• provide an explanation as to why.

Determinant of demand Demand Explanation


increases or
decreases?
Population increases

Population decreases

Increase in most peoples’ income

Decrease in most peoples’ income

Price of substitute increases

Price of substitute decreases

Price of complementary good


increases
Price of complimentary good
decreases
Product becomes a popular fad
(change in taste of buyers)
Product now out of fashion (change in
taste of buyers)
There is an expectation that the price
of the product will soon fall
There is a fear that the economy will
go into a recession where many firms
will fail and unemployment will
increase
Movement along the curve or a shift in the demand curve? Complete the table below by
indicating whether each scenario results in a change in the quantity demanded (movement along
the demand curve), or a change in demand (shift in the demand curve). If there is a shift in the
demand curve, indicate whether the curve shifts up or down.

Scenario Movement or shift up or


shift down?
1. There is an outbreak of the flu and sales of latex gloves
skyrocket.
2. A nail salon cuts the price it charges for manicures and
more clients come.
3. A chain of department stores extends the hours that stores
will remain open and total sales for the chain has increased.
4. The US Census Bureau has announced that there is baby
boom in the United States and sales of baby carriages have
increased.
5. John’s Bicycle shop increases the prices of bicycles and
sales decrease.
6. The City of New York has cut the number of city
employees by 10% and sales of big screen televisions falls.

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