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People hear that a hurricane is approaching and rush to buy flashlight batteries before the storm hits, even though the batteries have not yet gotten more expensive. What kind of demand determinant does this illustrate, and which way does the demand curve for batteries move?
AA change in population size; demand shifts left
BA change in expectations; demand shifts right
CA change in expectations; demand shifts left
DA change in income; demand shifts right
Answer & Solution
Correct answer: B. A change in expectations; demand shifts right
1. Expectations about future prices or conditions are a demand determinant separate from the good's current price.
2. Expecting scarcity or a future price rise makes buyers want more of the good right now, at every current price.
3. A curve showing higher quantity demanded at every price has shifted to the right.
4. This is neither a population change nor an income change, so options A and D name the wrong determinant.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_
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