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Graphing Demand Practice

Use the chart below to determine the best answer to the given scenario.

graph
Demand curve showing shifts in demand. D1 is the original demand line. It contains two points - A, which represents a higher price and lower demand and B, which represents lower price and higher demand. Line D2 shows an increase in demand- in other words, a higher quantity demanded for a given price. This line is above D1. Line D3 represents a decrease in demand, or a lower quantity demanded for a given price. It is below line D1.
  • A to B
  • B to A
  • D1 to D2
  • D1 to D3
  • No Change
  1. A nation is experiencing a severe drought, with no sign of relief in the near future. What will happen to the demand curve for umbrellas?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: d. D1 to D3. The demand curve shifts to the left, indicating a decrease in demand.

  2. To help sell umbrellas, stores offer a 50% discount. What will happen to the demand curve for umbrellas?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: a. A to B. The quantity demanded increases.

  3. The cost of producing umbrellas increases. What will happen to the demand curve for umbrellas?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: b. B to A. The quantity demanded decreases.

  4. The price of Xbox game consoles is reduced 50%. What will happen to the demand curve for Xbox games?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: a. A to B. The quantity demanded increases.

  5. The price of Xbox game consoles is reduced 50%. What will happen to the demand curve for Play Station game consoles?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: d. D1 to D3. The demand curve shifts to the left, indicating a decrease in demand.

  6. Congress passes a law that everyone has to be paid more. What will happen to the demand curve for inferior goods?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: d. D1 to D3. The demand curve shifts to the left, indicating a decrease in demand.

  7. Congress passes a law that everyone has to be paid more. What will happen to the demand curve for normal goods?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: c. D1 to D2. The demand curve shifts to the right, indicating an increase in demand.

  8. The price of gasoline decreases. What will happen to the demand curve for gasoline?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: a. A to B. The quantity demanded increases.

  9. The price of gasoline increases dramatically. What will happen to the demand curve for Sport Utility Vehicles (SUVs)?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: d. D1 to D3. The demand curve shifts to the left, indicating a decrease in demand.

  10. General Motors offers a mail-in rebate for all new car purchases. What will happen to the demand curve for new GM cars?
    1. A to B
    2. B to A
    3. D1 to D2
    4. D1 to D3
    5. no change

    Answer: c. D1 to D2. The demand curve shifts to the right, indicating an increase in demand.

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