2.1 ECONOMICS FOR THE VIRTUAL ENTERPRISE The business of America is business. " -Calvin Coolidge Worksheet 5A Exercise 1: Graphing the Demand Curve. Use the data presented in the Demand Schedule for CDs to graph the demand curve in the chart below. Demand Schedule For CDs Price per CD Quantity (in dollars) Demanded DEMAND CURVE* (in millions 20 20 100 19 19 200 18 18 300 17 17 400 16 16 500 15 (in d 15 600 14 14 700 13 13 12 800 11 12 900 100 200 300 400 500 600 700 800 900 1000 11 1000 Quantity Demanded (in millions) Exercise 2: Movement Along The Demand Curve. Answer the following questions based on the demand curve you have graphed: 1. When the price of a CD is $20, what is the quantity demanded by consumers? 2. When the price of a CD is $15, what is the quantity demanded by consumers? 3. When the price of a CD is $11, what is the quantity demanded by consumers? 4. As the price of a CD decreases, does the quantity of CDs demanded increase or decrease? 5. As the price of a CD increases, does the quantity of CDs demanded increase or decrease? Exercise 3: Characterizing the relationship between the change in price and the change in quantity demanded: Lines A and B are depicted in the table below. Line A depicts an inverse relationship between two variables that is characteristic of a demand curve; line B depicts a direct relationship between two variables. Line A Line B y y Negative slope: Inverse relationship Positive slope: Direct relationship between x and y variables; when y between x and y variables; when y decreases, x increases. increases, x increases