Match each economic scenario on the left with its precise effect on the demand curve for the specified target commodity on the right.
- An increase in the market price of beef. (Target commodity: Chicken, a close substitute)Outward (rightward) shift of the demand curve driven by the substitution effect.
- A decrease in the price of printer ink cartridges. (Target commodity: Printers, a complementary good)Outward (rightward) shift of the demand curve driven by a lower price for a complement.
- A reduction in the market selling price of yam tubers. (Target commodity: Yam tubers)Downward movement along the existing demand curve (increase in quantity demanded).
- Widespread consumer expectation that the price of rice will double next week. (Target commodity: Current market rice)Outward (rightward) shift of the current demand curve driven by consumer expectations.
Answer
1. An increase in beef price leads to an outward shift in chicken demand (substitution effect). 2. A drop in printer ink price leads to an outward shift in printer demand (complementary effect). 3. A fall in own price of yam tubers causes a downward movement along the yam demand curve (change in quantity demanded). 4. Expected future price increases for rice cause an outward shift in current rice demand.
Each economic factor correctly aligns with its economic principle: own-price changes cause a movement along the curve (change in quantity demanded), while substitute prices, complement prices, and future expectations act as non-price determinants that shift the entire curve outward.
Step-by-Step Solution
Key Concept
Determinants of Demand versus Changes in Quantity Demanded