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Author Question: What is the difference between a change in demand and a change in quantity demanded? What will be ... (Read 34 times)

cool

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on: Jun 29, 2018
What is the difference between a change in demand and a change in quantity demanded?
 
  What will be an ideal response?

Question 2

Explain the potential costs of high-powered incentives by considering the case of providing incentives to police officers. Would it be a good idea to pay higher wages to police officers if they make more arrests?
 
  What will be an ideal response?


janeli

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A change in demand means the demand curve has shifted. This is caused by a change in any variable other than price that can influence the market demand of the good in question. A change in quantity demanded refers to a movement along the demand curve and this is caused by a change in the price of the good in question.

Answer to Question 2

On the face of it, providing incentives to police officers to make more arrests sounds like a good idea. Motivated by higher wages, police officers are likely to work harder and to increase the number of arrests they make. However, since they earn higher wages simply based on the number of arrests they make, it is entirely possible that a good number of these arrests may not be warranted and would have been made only to earn higher wages.


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