FIGURE 3- 6 -Refer to Figure 3- 6. If the Demand Curve Shifts

question 91

Multiple Choice

FIGURE 3- 6
-Refer to Figure 3- 6. If the demand curve shifts from D1 to D2, while supply remains at S1, one could say that

• A) there has been an increase in demand for X.
• B) the price of a good which is a substitute for X must have fallen.
• C) there is now an excess demand at the new price of P1.
• D) the price increase has caused an increase in quantity demanded.
• E) the quantity demanded has decreased to Q1 and price has fallen to P2.

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Definitions:

Indifference Curve

A curve showing the different combinations of two products that yield the same satisfaction or utility to a consumer.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford with their income at current prices.

Consumer Demand Curve

A graphical representation showing the quantity of a product that consumers are willing and able to purchase at various price levels.

Marginal Utility

The additional satisfaction or utility gained by consuming one more unit of a good or service.