Page 100 - Krugmans Economics for AP Text Book_Neat

3. If an increase in income leads to a decrease in demand, the good is c. Demand will increase today.
a. a complement. d. Demand will decrease today.
b. a substitute. e. No change will occur today.
c. inferior.
5. Which of the following will increase the demand for disposable
d. abnormal.
diapers?
e. normal.
a. a new “baby boom”
4. Which of the following will occur if consumers expect the price b. concern over the environmental effect of landfills
of a good to fall in the coming months? c. a decrease in the price of cloth diapers
a. The quantity demanded will rise today. d. a move toward earlier potty training of children
b. The quantity demanded will remain the same today. e. a decrease in the price of disposable diapers

Tackle the Test: Free-Response Questions
1. Create a table with two hypothetical prices for a good and two 2. Draw a correctly labeled graph showing the demand for apples.
corresponding quantities demanded. Choose the prices and On your graph, illustrate what happens to the demand for
quantities so that they illustrate the law of demand. Using your apples if a new report from the Surgeon General finds that an
data, draw a correctly labeled graph showing the demand curve apple a day really does keep the doctor away.
for the good. Using the same graph, illustrate an increase in
demand for the good.

Answer (6 points)
Price
Price Quantity
$4 10
2 14
$4

2

D D 2
0 10 14 Quantity
1 point: Table with data labeled “Price” (or “P”) and “Quantity” (or “Q”)
1 point: Values in the table show a negative relationship between P and Q
1 point: Graph with “Price” on the vertical axis and “Quantity” on the horizontal
axis
1 point: Negatively sloped curve labeled “Demand” or “D”
1 point: Demand curve correctly plots the data from the table
1 point: A second demand curve (with a label such as D 2 ) shown to the right of
the original demand curve

58 section 2 Supply and Demand