2. Drag the correct word/phrase to each sentence. A and B are substitutes. It fo

Question

2. Drag the correct word/phrase to each sentence. A and B are substitutes. It follows that as the price of good A rises, theof good A will decline and the demand for good B will Goods Consider the demand curve for apples. The price of an apple is a factor whereas a change in preferences is a An upward-sloping curve represents the law of supply, which holds that as price rises,fises. if the price of a good is expected to rise, the current demand for the good will factor. Fill in the blanks with words that would best complete the passage shift increase fall rise decrease quantity demanded movement quantity supplied

Explanation / Answer

* Change in one of the factors of demand like the price of the product is a shift factor.

* Change in preference causes either increase or decrease in demand, hence it is a movement factor.

* This is a fundamental principle of economic theory.

* An increase in the expected price of a good will cause the demand for the good to increase. That is it shifts to the right.

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