Chapter 4 
Problems Set 1 
Demand
Answers

You are given various goods or services followed by a statement. 

Decide if this statement would shift the demand curve left or right or would not change it.

Good: porterhouse steak (lobster if you don't like meat)

• Your income declines.

Demand shifts left 

Good: sun screen  SPF54

• The ozone layer is depleting more rapidly than originally thought.

Demand shifts right

Good:  orange juice

• The price of lemonade rises.

Demand shifts right

Good: tennis balls

• The price of tennis rackets doubles.

Demand shifts  left

 Good: air line tickets

• The all airlines reduce their fares by 10%.

Demand does NOT change, its solely a price change.  Only quantity demanded changes.

Good:  wood burning stoves

• The price of fuel oil is expected to fall rapidly.

Demand shifts left

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