Ted is a careful planner and a careful eater. He plans his meals for the week, and his favorite food is salad. Column 1 lists the number of salads he would buy each week at different prices.

a) Use Column 1 to plot Ted's demand curve. [For simplicity, you can assume the demand is continuous; in other words you can connect the dots given by the above].

b) The price of a salad is $7. What is Ted's consumer surplus for the week? Illustrate it in your figure. [The assumption made above will let you apply the formulas for consumer surplus in your text.]

c) How would you explain the number you found in (b) to a friend who does not know demand curves?

d) Suppose the price rises to $9. What happens to Ted's weekly salad purchases? Do we call this a "decrease in demand" or a "decrease in the quantity demanded"?

e) Something changes in Teds's life. He now exhibits the demand in Column 2. Plot Ted's new demand curve, and label it D' in your graph.

f) What might have changed in Ted's life to cause his demand to shift? Briefly discuss 3 possibilities.

g) As a matter of convention, what do we call what happened in

e)? An "increase in demand" or an "increase in the quantity demanded"?