Sophia Pathways Principles of Macroeconomics Unit 2 Challenge 2.1 Laws of Supply and Demand

Principles of Macroeconomics Unit 2 - Challenge 2.1: Laws of Supply and Demand 1 — Law of Demand Consider the graph. Which of the following statements is FALSE about the law of demand? When price decreases, the quantity demanded will always increase by the same amount. 2 — Shifts in Demand A demand curve can shift for many reasons. Select the reason below that does NOT shift a demand curve. There are changes in the price of the good. During the 18th century, as troubles with Britain escalated, American colonists stopped drinking British tea as a form of protest, and instead started drinking coffee as a form of patriotic duty. Which factor of demand is this an example of? Change in taste/preference 3 — Law of Supply As prices increase, producers are willing to __________. supply a larger quantity of a good or service 4 — Shifts in Supply Which of the following causes a shift in supply to the left? A natural disaster that destroys farms and factories 5 — Supply and Demand Movements along the supply curve are a result of changes in __________. Price 6 — Establishing Equilibrium If the price of organic vegetables reaches equilibrium, which of the following describes what will happen? There will be no market basis for the price to change. 7 — Impact of Price on Quantity Supplied/Demanded Where do supply and demand intersect, ceteris paribus? At equilibrium
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