Glossary
Knowledge Check - Scenario 1
For the following milk market scenario, identify the type and cause of change.
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
1. Based on Scenario 1, the demand curve for milk
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shifts to the right. |
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shifts to the left. |
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does not shift. |
That's incorrect. An increase in the price of milk would cause movement along
the demand curve, not a shift of the demand curve to the right or left.
The correct answer is the demand curve does not shift.
That's correct. An increase in the price of milk would cause movement along
the demand curve, not a shift of the demand curve to the right or left.
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
2. Based on Scenario 1, movement occurs
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up the demand curve for milk. |
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down the demand curve for milk. |
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There is no movement. |
That's incorrect. An increase in the price of milk would cause movement up
the demand curve for milk.
That's correct. An increase in the price of milk would cause movement up
the demand curve for milk.
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
3. Based on Scenario 1, there is
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a change in demand for milk. |
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a change in the quantity demanded of milk. |
That's incorrect. An increase in the price of the milk would cause a change
in quantity demanded.
That's correct. An increase in the price of the milk would cause a change
in quantity demanded.
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
4. Based on Scenario 1, which factor caused the change in quantity demanded
of milk?
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A change in consumer expectations |
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A change in consumer tastes or preferences |
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A change in the number of consumers in the market |
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A change in consumer income |
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A change in the price of a substitute good |
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A change in the price of a complementary good |
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A change in the price of milk |
That's incorrect. The change in the quantity demanded of milk resulted from
a change in the price of milk.
That's correct. A change in the price of milk caused a change in quantity
demanded, not a change in demand.