Question

b. given the following diagram, indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curve or a shift in the demand curve.
i. change in market price: (click to select)
ii. change in income: (click to select)
iii. change in consumer expectations: (click to select)
iv. change in the price of a related good: (click to select)
v. change in the price of an unrelated good: (click to select)
vi. change in preferences for this good: (click to select)
(diagram: price - quantity graph with curves d, d and points a, b, c)
a change from point a to point b = (click to select)
a change from point a to point c = (click to select)

Explanation:

• A movement along the demand curve only occurs when the good's own market price changes; all other non-price determinants cause a shift of the entire demand curve.
• Moving between points on the same demand curve (A to B) is a movement along the curve, while moving to a point on a new demand curve (A to C) is a shift.

Answer:

i. Change in market price: Movement along the demand curve
ii. Change in income: Shift in the demand curve
iii. Change in consumer expectations: Shift in the demand curve
iv. Change in the price of a related good: Shift in the demand curve
v. Change in the price of an unrelated good: Shift in the demand curve
vi. Change in preferences for this good: Shift in the demand curve
A change from point A to point B: Movement along the demand curve
A change from point A to point C: Shift in the demand curve