DEMAND WORKSHEET
Exercise 1: Define the following terms:
1. Demand
2. Demand curve
3. Demand schedule
4. Law of demand
5. Determinants of demand
6. Individual demand
7. Market demand
Exercise 2: Differentiate between:
1. Substitute and complementary goods
2. Normal and inferior goods
3. Movement along a demand curve and shift of a demand curve
4. Increase in demand and decrease in demand
5. Extension of demand and contraction of demand
Exercise 3: Complete the following:
1. The law of demand states- when the price increases, the quantity demanded will ___________.
When the price decreases, the quantity demanded will _______________.
2. If the federal government says that fish is healthy for you, the demand for fish will
(increase / decrease). Which determinant of demand causes this change? _____________________
Which way will the demand curve shift? (left / right) Draw the new demand curve- Label it D1.
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D
Q
3. Economists announce that the unemployment rate will increase over the next six months.
The demand for new homes will (increase / decrease). Which determinant causes this change?
_____________________. Which way will the demand curve shift? (left / right) Draw the new demand
curve- Label it D2
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Q
4. The price of syrup increases, the demand for pancakes will (increase / decrease).
Which determinant causes this change? _________________________.
Which way will the demand curve shift? (left / right) Draw the new demand curve- Label it D3.
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Q
5. The price of airline tickets goes up, the demand for train tickets will (increase / decrease).
Which determinant causes this change? ___________________________ Which way will the demand curve
shift? (left / right) Draw the new demand curve-Label it D4.
P
D
Q
6. Provide a complement for the following items:
car- __________________ bread-__________________ shoes-_______________
7. Provide a substitute for the following items:
car-___________________ pen-____________________ television-____________
8. Using the demand schedule below, draw a demand curve.
Demand Schedule
Price Quantity
$6.00 6
$5.00 6
$4.00 6
$3.00 6
9. Plot the points for the demand curve and label the line D1.
Demand Schedule #1
Price Quantity P
$9.00 1
$6.00 3
$5.00 4
$2.00 6
$1.00 7
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10.
Demand Schedule #2
Price Quantity
$9.00 3
$8.00 4 Use the graph above, plot the points for the new demand curve and
$5.00 6 label it D2
$4.00 7
$1.00 9
12. Does a shift from D1 to D2 reflect an increase or a decrease in demand? _________________
Exercise 4: Identifying the determinants of demand. You have seen have how an increase in demand is
depicted on a graph by a shift in the demand curve.
• When the demand curve shifts upward and to the right, this is indicative of an increase in demand.
• When the demand curve shifts to the left, this is indicative of a decrease in demand.
• Factors that result in a change in demand are the determinants of demand.
Complete the table below. For each determinant of demand:
• indicate whether demand will increase or decrease;
• provide an explanation as to why.
Determinant of demand Demand Explanation
increases or
decreases?
Population increases
Population decreases
Increase in most peoples’ income
Decrease in most peoples’ income
Price of substitute increases
Price of substitute decreases
Price of complementary good
increases
Price of complimentary good
decreases
Product becomes a popular fad
(change in taste of buyers)
Product now out of fashion
(change in taste of buyers)
There is an expectation that the
price of the product will soon fall
There is a fear that the economy
will go into a recession where
many firms will fail and
unemployment will increase
Movement along the curve or a shift in the demand curve? Complete the table below by indicating
whether each scenario results in a change in the quantity demanded (movement along the demand curve), or
a change in demand (shift in the demand curve). If there is a shift in the demand curve, indicate whether the
curve shifts up or down.
Scenario Movement or shift up or
shift down?
1. There is an outbreak of the flu and sales of latex
gloves skyrocket.
2. A nail salon cuts the price it charges for manicures and
more clients come.
3. A chain of department stores extends the hours that
stores will remain open and total sales for the chain has
increased.
4. The US Census Bureau has announced that there is
baby boom in the United States and sales of baby
carriages have increased.
5. John’s Bicycle shop increases the prices of bicycles
and sales decrease.
6. The City of New York has cut the number of city
employees by 10% and sales of big screen televisions
falls.
