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Demand

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Two Approaches to Demand

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Income and Substitution Effects

Practice Problems

Problem : Nathan and Joe are shopping for video games. Nathan's demand function for video games is Q = 30 - 3P, and Joe's demand function is Q = 48 - 4P. What will their combined demand be if the price is $5? $11?

Solution for Problem 1 >>

Problem : Michelle is shopping for shirts. She chooses one, then notices that the shirts are on sale, and gets another two shirts. How can you explain this with a graph?

Solution for Problem 2 >>

Problem : Jenn's parents increase her allowance, so she spends more money on candy every week. How can you explain this with a graph?

Solution for Problem 3 >>

Problem : Kris and Tim's demand curves for playing cards look like this:

Tim and Kris's Demand curves for Playing Cards

Who wants more when the price is $3 a pack? $4 a pack? What is their combined demand at $4 a pack?

Solution for Problem 4 >>

Problem : Emily decides to set aside $200 from her paycheck every month. How will this affect her demand curve? (You don't have to use specific numbers, just explain)

Solution for Problem 5 >>