1. Explain fully the difference between an increase in demand and an increase in quantity demanded. Be sure to explain increase, not change or decrease. Provide at least four reasons for an increase in demand. Use appropriate graphs to illustrate your answer.
2. Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded falls from 600 to 400. Use the value obtained and a specific example to determine whether price must be increased or decreased to increase total revenue. Explain why. Note: Explain only how to increase total revenue, not decrease it.
3. Explain the concept of income elasticity of demand. How is it used to identify normal goods, luxuries, necessities, and inferior goods? Be as specific and logical as possible.
4. Why is a minimum wage such a popular government policy in most countries? Use your understanding of supply/demand analysis to explain the advantages of the minimum wage and the disadvantages of the minimum wage. Provide a graph to illustrate your answer. Be sure to use your graph and the laws of supply and demand to answer the question, not public opinion.