Figure 4-4

-Assume that Figure 4-4 shows demand for new houses.A decrease in income of buyers will change demand from

Question

Figure 4-4
 
-Assume that Figure 4-4 shows demand for new houses.A decrease in income of buyers will change demand from

Quizplus · Accepted Answer

A decrease in the income of buyers is likely to reduce their willingness and ability to purchase new houses. This will shift the demand curve to the left from D2 to D1, reflecting a decrease in the quantity of houses demanded at any given price level. Option A is incorrect because it suggests that the initial demand curve was D1, which is not supported by the information provided. Options C and D are also incorrect because there is no information to suggest that other factors affecting demand, such as population growth or changing preferences, are at play.

Figure 4-4 -Assume That Figure 4-4 Shows Demand for New Houses.A Decrease