Name five of the seven things listed in the textbook Survey

Name five of the seven things listed in the textbook, Survey of economics: Principles, applications, and tools (5th ed.), that can cause demand to change up or down.

Solution

Some of the factors that cause a demand curve to shift include:

Change in income: It might be reasonable to expect an increase (decrease) in demand for luxury goods when consumer incomes increase (decrease).

Change in tastes and preferences: If a particular product is more (less) liked, the demand for that product will certainly increase (decrease).

Change in the price of substitute goods: Say if the price of pork increases (decreases), the demand for beef is likely to increase (decrease).

Change in the price of goods that are complementary: If the price of gasoline goes up considerably, the demand for SUVs will shift down.

Distribution of income: If the rich become richer and the poor become poorer, the demand for luxury goods would increase.

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