#QUESTION 1: The demand side of the market

1.1What is a demand schedule? What is a demand curve?

1.2 What is the difference between a change in demand and a change in quantity demanded?

1.3 State whether each of the following events will result in a movement along the demand curve for McDonald's Big Mac burgers or whether it will cause the curve to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right and draw a graph to illustrate the shift.

a.The price of Hungry Jack's Whopper burgers declines.

b.McDonald's distributes vouchers for $1.00 off on a purchase of a Big Mac.

c.A shortage of potatoes causes the price of fries to increase.

d.KFC raises the price of a bucket of fried chicken.

e.The Australian economy enters a period of rapid growth in incomes.

1.4 What are the main variables that will cause the demand curve to shift? Give an example of each.

1.5 What do economists mean when they use the Latin expression ceteris paribus?

1.6 What is the law of demand? Use the substitution effect and income effect to explain why an increase in the price of a product causes a decrease in the quantity demanded.

#QUESTION 2: The demand side of the market

2.1 For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated.

a.Pepsi and Coke

b.Hot dog sausages and soft bread rolls

c.Vegemite and strawberry jam

d.MP3 players and graphics calculators.

2.2 When tablet computers based on the Android operating system were first introduced, there were relatively few applications, or 'apps', available for them. Now, there are many more apps available for Android-based tablets. Are these apps substitutes or complements for tablet computers? How has the increase in the availability of apps for Android-based tablets affected the demand for Apple iPads?Explain.

2.3 Suppose that the following table shows the quantity demanded of UGG boots at five different prices in 2017 and 2018.

QUANTITY DEMANDED

PRICE ($)

2017

2018

160

5 000

4 000

170

4 500

3 500

180

4 000

3 000

190

3 500

2 500

200

3 000

2 000

Name two different variables that could cause the quantity demanded of UGG boots to change as indicated from 2017 to 2018.

2.4 Some analysts have suggested that the reduced number of bookshops will not lead to fewer book sales because the rise in the number of online bookshops and e-books will reduce the cost of books and therefore increase the demand for them. Do you agree with this analysis? Briefly explain.