Obj 3.8

Question 1

What causes movements along the demand curve

Answer 1

A change in the price of a g/s. In other words the q.d of the good changes as its price changes, ceteris paribus (assuming that none of the other factors of demand for the good changes)

Question 2

What two possibilities does movements along the demand curve cause

Answer 2

-A fall in price, resulting in an increase in the quantity demanded (q.d) this is termed the extension of demand
-An increase in price resulting in a decrease in qd, this is termed a contraction of demand

Question 3

Give an example of extension in demand

Answer 3

As a price of cars fall from a 100,000 to 60,000 quantity demanded increases from 4 to 8, this leads to a movement along the demand the demand curve form point x to point y, which is called an extension

Question 4

Give an example of contraction of demand

Answer 4

As the price of cinema tickets increases from 5 to 10, the demand for tickets decreases from 12 to 6. This results in a movement along the demand curve from point A to point B, which is called a contraption