AP_Krugman_Textbook

58 section 2 Supply and Demand

c. Demand will increase today.

d. Demand will decrease today.

e. No change will occur today.

5. Which of the following will increase the demand for disposable
   diapers?
   a. a new “baby boom”
   b. concern over the environmental effect of landfills
   c. a decrease in the price of cloth diapers
   d. a move toward earlier potty training of children
   e. a decrease in the price of disposable diapers


6. If an increase in income leads to a decrease in demand, the good is
   a. a complement.
   b. a substitute.
   c. inferior.
   d. abnormal.
   e. normal.


7. Which of the following will occur if consumers expect the price
   of a good to fall in the coming months?
   a. The quantity demanded will rise today.
   b. The quantity demanded will remain the same today.

Tackle the Test: Free-Response Questions

1. Create a table with two hypothetical prices for a good and two
   corresponding quantities demanded. Choose the prices and
   quantities so that they illustrate the law of demand. Using your
   data, draw a correctly labeled graph showing the demand curve
   for the good. Using the same graph, illustrate an increase in
   demand for the good.

Answer (6 points)

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

2. Draw a correctly labeled graph showing the demand for apples.
   On your graph, illustrate what happens to the demand for
   apples if a new report from the Surgeon General finds that an
   apple a day really doeskeep the doctor away.

10

14

$4

2

Price Quantity

0

Price

Quantity

$4

2

10 14

D D 2