This website requires a browser which supports HTML5.
Some elements of this site will not work correctly until you upgrade your browser.
Question
1
State
the
law
of
demand
Check
answer.
An
increase
in
price
will
lead
to
a
decrease
in
the
quantity
demanded
-
assuming
ceteris
paribus.
Next
Question.
Click
to
enlarge
image.
Click
and
hold
to
reduce.
Question
2
Using
the
diagram
below,
fully
explain
the
impact
of
a
decrease
in
price
from
$5.00
to
$3.50
for
Mellow
Easter
Eggs.
Check
answer.
A
decrease
in
price
from
$5
to
$3.50
for
Mellow
Easter
Eggs
will
cause
the
quantity
demanded
by
Jack
to
increase
from
1
Easter
Egg
to
5
Easter
Eggs.
This
is
because
Jack
can
now
afford
to
buy
/
is
more
willing
to
buy,
more
and
he
will
buy
less
other
types
of
Eggs
and
buy
more
mellow
Easter
Eggs
as
they
are
now
relatively
cheaper.
Next
Question.
Previous
Question.
Click
to
enlarge
image.
Click
and
hold
to
reduce.
An
increase
in
price
from
$2
to
$3
for
Splite
soft
drink
will
cause
a
decrease
in
the
quantity
demanded
by
Grace
from
5
cans
to
1
can
because
she
cannot
afford
/
is
not
willing
to
buy
as
many
cans
and
she
may
also
buy
a
different
cheaper
soft
drink
as
they
are
now
r
elatively
cheaper
and
so
buy
less
Splite
soft
drink.
Question
3
Using
the
diagram
below,
fully
explain
the
impact
of
an
increase
in
price
from
$2.00
to
$3.00
for
Splite
soft
drink.
Check
answer.
Next
Question.
Previous
Question.
Click
to
enlarge
image.
Click
and
hold
to
reduce.
Chilli
Sauce
and
Chutney
Sauce
are
substitutes
for
Vince,
meaning
they
are
goods
that
he
consumes
instead
of
each
other.
When
the
price
of
Chilli
Sauce
decreases
from
P1
to
P2,
the
quantity
demanded
for
Chilli
Sauce
increases
from
Q1
to
Q2,
and
Vince’s
demand
for
Chutney
Sauce
will
decrease
.
The
increase
in
the
quantity
demanded
for
Chilli
Sauce
is
shown
by
a
movement
along
(down)
the
demand
curve.
The
decrease
in
demand
for
Chutney
sauce
is
shown
by
a
shift
of
the
demand
curve
left
from
D
to
D1
,
meaning
less
sauce
will
be
demanded
at
each
and
every
price.
Possible
flow-on
effects:
•
Vince
will
consume
more
Chili
sauce
which
may
have
a
higher
sugar
content
and
so
be
bad
for
his
health,
leading
to
health
problems.
Question
4
Using
the
diagram
below,
discuss
the
relationship
between
Vince’s
demand
for
Chilli
Sause
and
Chutney
Sauce.
Fully
explain
the
impact
of
a
decrease
in
price
for
Chili
Sauce
on
Vince
and
1
possible
flow
on
effect.
Check
answer.
Next
Question.
Previous
Question.
Click
to
enlarge
image.
Click
and
hold
to
reduce.
Printers
and
Ink
Cateridges
are
complements
for
Marika,
meaning
they
are
goods
that
she
consumes
in
conjunction
with
each
other.
When
the
price
of
Printers
decreases
from
P1
to
P2,
the
quantity
demanded
for
Printers
increases
from
Q1
to
Q2,
and
Marika’s
demand
for
Ink
Cartridges
will
increase
.
The
increase
in
the
quantity
demanded
for
Printers
is
shown
by
a
movement
along
(down)
the
demand
curve.
The
increase
in
demand
for
Ink
Cartridges
is
shown
by
a
shift
of
the
demand
curve
right
from
D
to
D2
,
meaning
more
ink
cartridges
will
be
demanded
at
each
and
every
price.
Possible
flow-on
effects:
•
Marika
will
consume
more
ink
cartridges
and
use
a
lot
more
paper,
maybe
wasting
paper.
Question
5
Using
the
diagram
below,
discuss
the
relationship
between
Marika’s
demand
for
Printers
and
Ink
Cateridges.
Fully
explain
the
impact
of
a
decrease
in
price
for
Printers
on
Marika
and
1
possible
flow
on
effect.
Check
answer.
Next
Question.
Previous
Question.
Click
to
enlarge
image.
Click
and
hold
to
reduce.
Meg
considers
Budget
Brand
Cleaners
to
be
an
inferior
good
,
a
good
she
would
prefer
not
to
buy
,
but
buys
them
because
she
cannot
afford
better
products.
With
an
increase
in
income
Meg
can
now
afford
to
buy
better
quality
cleaners
and
so
her
demand
for
Budget
brand
Cleaners
will
shift
to
the
left
and
decrease
from
D
to
D2
.
A
flow
on
effect
may
be
that
the
better
quality
cleaners
are
more
environmentally
friendly
and
better
for
her
health
and
so
she
may
become
healthier.
The
better
quality
cleaners
could
also
be
a
lot
better
at
cleaning
and
result
in
her
home
being
a
lot
cleaner
than
before.
Question
6
Using
the
diagram
below,
explain
the
impact
of
an
increase
in
Meg’s
income
on
her
demand
for
Budget
brand
Cleaners.
Explain
the
flow
on
effects
of
her
increase
in
income
and
change
in
demand.
Check
answer.
Next
Question.
Previous
Question.
Dean
considers
Pak’n’
Save
to
be
an
inferior
good
,
a
good
he
would
prefer
not
to
use
,
but
uses
them
because
he
cannot
afford
a
more
expensive
supermarket.
He
considers
Nosh
to
be
a
luxury
good
-
an
expensive
and
high
quality
Food
market
that
is
expensive
for
him
to
use.
With
an
increase
in
income
Dean
can
now
afford
to
use
Nosh
-
a
luxury
good,
more
often
and
so
his
demand
for
Pak’
n’
Save
-
an
inferior
good,
will
decrease.
A
flow
on
effect
may
be
that
Dean
is
now
buying
more
organic
and
high
quality
products
and
so
his
health
will
improve
and
he
may
not
need
to
spend
as
much
money
on
doctors
or
medicines.
Question
7
Dean
is
interested
in
healthy
living
and
tries
to
buy
healthy
good
when
ever
he
can.
At
the
moment
he
goes
shopping
at
Pak’n’Save
but
would
like
to
shop
at
Nosh
-
an
organic
and
high
quality
food
market.
Fully
explain
the
impact
of
an
increase
in
income
on
Dean
use
of
Pak,n,
Save
and
Nosh
and
a
flow
on
effect
this
may
have
for
Dean.
Check
answer.
Previous
Question.