Topic:

Theory of Demand

Q1
Define Demand:
Cross out the wrong option:
-
-
-
-

The demand curve is upward/downward sloping

and so as the price rises, quantity demanded should rise/fall causing a movement along
the demand curve
this shows that there is an positive/inverse relationship between price and quantity
demanded
This is because consumers are utility maximisers so will demand more/less at a lower price
as it allow them to buy more of the same product with the same income or other items as
well.

Q2
Using the data below and ensuring that you label everything carefully, plot the demand curve and
answer the questions below
Price ()
2
4
6
8

Quantity Demanded
100
80
60
40

What is the quantity demanded at 5..
Show this on the diagram
If price rises from 5 to 7, what is the new level of quantity demanded?
Cross out the wrong option: so if price rises we see an expansion/contraction along the demand
curve
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Topic: Theory of Demand

Q3
As we saw above a change in price causes a movement along the demand curve. However, other
factors cause a shift in or out of the demand curve. Complete the table below to show whether
demand for iPhones would shifts in or out:
Factor
A rise in the price of a Samsung phones
A successful advertising campaign by Apple
A rise in global populations
Globalisation increases incomes around the world
A rise in the price of iTunes

Demand for iPhones shifts in or out?

Q4
Using a diagram, explain the effect of an increase in global incomes (assume that price of iPhones
stays constant) by using filling in the gaps below.








Explanation:
As we have seen, a rise in global incomes has.demand for consumer durables such
as iPhones. With higher average incomes, iPhones become more.to more
people causing a ..in the demand for iPhones. As such, the diagram shows a
.. to the ..of the demand curve from D1 to D2 and indicates that
there is anin quantity demanded at every..
Choose from: increase, affordable, rise, shift, price, right, increased
Q5
Using your phone, tablet, PC or knowledge, jot down a few ideas as to why demand for DVD players
has shifted to the left in recent years.

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