Questions: For each of the following changes in the market for apples, explain why demand will increase, decrease, or remain unchanged. 1. The price of peanut butter (a complement) increases. 2. Consumer incomes increase (and apples are a normal good). 3. It is confirmed scientifically that an apple a day DOES keep the doctor away. 4. The price of apples decreases. 5. A disease affecting apple trees causes people to expect that there will be no apples next year.

To analyze the changes in the market for apples, we need to consider how each scenario affects demand:

1. The price of peanut butter (a complement) increases.

   • Explanation: When the price of a complementary good increases, the demand for the related good typically decreases. Peanut butter and apples can be considered complementary if they are often consumed together (e.g., in snacks). Therefore, if peanut butter becomes more expensive, people might buy less of it, leading to a decrease in the demand for apples.

2. Consumer incomes increase (and apples are a normal good).

   • Explanation: For normal goods, an increase in consumer income generally leads to an increase in demand. Since apples are specified as a normal good, higher incomes mean consumers have more purchasing power, and they are likely to buy more apples, increasing demand.

3. It is confirmed scientifically that an apple a day DOES keep the doctor away.

   • Explanation: If scientific evidence supports the health benefits of eating apples, consumer perception of apples' value increases. This positive information can lead to an increase in demand as more people are motivated to consume apples for their health benefits.

4. The price of apples decreases.

   • Explanation: A decrease in the price of apples does not directly affect demand; rather, it affects the quantity demanded. According to the law of demand, as the price decreases, the quantity demanded increases. However, this is a movement along the demand curve, not a shift in the demand curve itself.

5. A disease affecting apple trees causes people to expect that there will be no apples next year.

   • Explanation: If consumers expect a future shortage of apples, they might increase their current demand to stock up before the shortage occurs. This expectation can lead to an increase in current demand as people try to purchase apples while they are still available.