Leaving Certificate Microeconomics Practice Test

A demand curve shifts due to factors that influence consumer behavior or willingness to purchase a product at various price levels. Changes in incomes can lead to increased or decreased purchasing power, thus shifting the demand curve to the right (increase in demand) or left (decrease in demand). Similarly, changes in tastes or preferences can affect consumer desire for a product, leading to a shift in the demand curve as well.

Government policies, including regulations, taxes, and subsidies, can also affect how much of a good consumers are willing or able to buy, resulting in changes to demand.

In contrast, a change in the price of the good itself does not cause the demand curve to shift; instead, it leads to a movement along the existing demand curve. This movement represents a change in the quantity demanded in response to a price change, rather than a change in demand itself, which is indicated by a shift of the curve. Thus, this choice is not a factor that causes a demand curve to shift.