The demand curve for Widgets is given by Q_D = 6000 - 2y - 200p + 30p_G,where Q_D is the quantity of widgets demanded,y is the per capita income and p_G is the price of Gizmos.An increase in per capita income will cause A)demand shifts left. B)demand shifts right. C)demand increases. D)movement along the demand curve.

Question

Quizplus · Accepted Answer

CAn increase in per capita income, denoted by 'y' in the equation, would decrease the quantity of widgets demanded since the term -2y indicates that demand decreases as income increases. This leads to a leftward shift in the demand curve, which is a change in demand, not just a movement along the demand curve.

The Demand Curve for Widgets Is Given by QD =

The Demand Curve for Widgets Is Given by Q_D =