Practice Problems
Demand
Econ 200

Show graphically what will happen to demand in each case:

1.  Assume peanut butter and jelly are complements.  What will happen in the market for jelly if the price of peanut butter increases?

2.  Assume that Jello is a normal good.  What will happen in the Jello market if the income of the people who buy Jello goes down?

3.  Assume that turkey and ham are substitutes.  What will happen in the market for ham if the price of turkey increases?

4.  Assume the price of cars increases.  What will happen in the car market?

5.  Assume spam is an inferior good.  What will happen in the market for spam if the income of the people buying spam decreases?

6.  Assume popcorn and movies are complements.  What will happen in the market for popcorn if the price of movies goes down?

7.  Assume that bread and butter are complements.  Also assume that bread is a normal good.  What will happen in the market for bread if the price of butter increases AND the income of the people who buy bread increases?  (Hint, shift one at a time but on the same graph).

8.  Assume that apples are an inferior good.  Also assume that apples and oranges are substitutes, and that apples and caramel are complements.  What will happen in the market for apples if the price of oranges decreases AND the income of people who buy apples increases AND the price of caramel increases?  (Hint, shift one at a time but on the same graph).