The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 13

Is it strictly true that a change in the price of a good causes a change in the quantity of that good demanded, but not a shift in the demand curve for the good?
(a) What effect do you suppose the large increases in the price of gasoline in the 1970s had on the demand (curve) for fuel-efficient cars?
(b) What effect did this have after several years on the original demand (curve) for gasoline?
(c) How did the huge increase in the price of home heating oil during 2003 affect the demand for housing insulation? How did this eventually shift the demand for heating oil?
(d) Can you think of similar processes through which changes in the price of a good would lead, over time, to shifts in the demand for the good?
(e) If the price of a good returned to its previous level after a time, but the quantity demanded did not, would this be evidence that the demand had changed in the interim?