Rishi Bhagat

Ms. Martin
AP Economics – C
9/18/2020

Module 5 Questions

1. Explain whether each of the following events represents (i) a change in demand (a
shift of the demand curve) or (ii) a movement along the demand curve (a change in
the quantity demanded).
a. A store owner finds that customers are willing to pay more for umbrellas on
rainy days.

The quantity of umbrellas demanded is higher at any given price on a rainy day than
on a dry day. This is a rightward shift of the demand curve, since at any given price
the quantity demanded rises. This implies that any specific quantity can now be sold
at a higher price.

b. When XYZ Mobile, a cellular plan provider, offered reduced rates on data
charges, its volume data usage by users increased sharply.

The quantity of weekend calls demanded rises in response to a price reduction. This is
a movement along the demand curve for weekend calls.

c. People buy more long-stem roses the week of Valentine’s Day, even though
the prices are higher than at other times during the year.

The demand for roses increases the week of Valentine's Day. This is a rightward shift
of the demand curve.

d. A sharp rise in the price of gasoline leads many commuters to join carpools
in order to reduce their gasoline purchases.

The quantity of gasoline demanded falls in response to a rise in price. This is a

movement along the demand curve.
Rishi Bhagat
Ms. Martin
AP Economics – C
9/18/2020

2. Draw a correctly labeled graph showing the demand for apples. On your graph,
illustrate what happens to the demand for apples if a new report from the Surgeon
General finds that an apple a day really does keep the doctor away.