1. according to the law of demand, what happens to the quantity demanded as the price decreases?\na…

1. according to the law of demand, what happens to the quantity demanded as the price decreases?\na. quantity demanded increases as price decreases\nb. quantity demanded decreases as price decreases\n2. according to the law of demand, what happens to the quantity demanded as the price increases?\na. quantity demanded increases as price increases\nb. quantity demanded decreases as price increases\nuse the scenario below for 3, 4, and 5:\nthe price of ice cream decreases by 50%.\n3. sketch the changes on the graph.\na. identify the point on the demand curve that best reflects the change in the ice cream market.\ni. use an arrow to indicate the direction of movement along the demand curve.\nb. label the new quantity demanded and price.\n4. what happened to the quantity demanded based on the price change in the scenario?\na. the quantity demanded increased due to the price change\nb. the quantity demanded decreased due to the price change\n5. explain how the scenario relates to the cost - benefit principle or the opportunity cost principle.

1. according to the law of demand, what happens to the quantity demanded as the price decreases?\na. quantity demanded increases as price decreases\nb. quantity demanded decreases as price decreases\n2. according to the law of demand, what happens to the quantity demanded as the price increases?\na. quantity demanded increases as price increases\nb. quantity demanded decreases as price increases\nuse the scenario below for 3, 4, and 5:\nthe price of ice cream decreases by 50%.\n3. sketch the changes on the graph.\na. identify the point on the demand curve that best reflects the change in the ice cream market.\ni. use an arrow to indicate the direction of movement along the demand curve.\nb. label the new quantity demanded and price.\n4. what happened to the quantity demanded based on the price change in the scenario?\na. the quantity demanded increased due to the price change\nb. the quantity demanded decreased due to the price change\n5. explain how the scenario relates to the cost - benefit principle or the opportunity cost principle.

Answer

Brief Explanations:

  1. The law of demand states an inverse relationship between price and quantity demanded. So, as price decreases, quantity demanded increases.
  2. Similarly, as price increases, quantity demanded decreases according to the law of demand.
  3. When the price of ice - cream decreases by 50%, on a demand - curve graph, we move downwards along the demand curve. The new point on the demand curve will have a lower price and a higher quantity demanded. We can label the new price as $P_2$ (lower than the original $P_1$) and the new quantity demanded as $Q_2$ (higher than the original $Q_1$).
  4. Since the price of ice - cream decreased, based on the law of demand, the quantity demanded increased.
  5. In terms of the cost - benefit principle, when the price of ice - cream decreases by 50%, the benefit (enjoying ice - cream) remains the same or may even seem greater, while the cost (price paid) has decreased. So, consumers are more likely to buy more ice - cream. In terms of opportunity cost, with the price decrease, the opportunity cost of not buying ice - cream (the potential enjoyment forgone) relative to other goods has increased, making it more attractive to purchase ice - cream.

Answer:

  1. a. Quantity demanded increases as price decreases
  2. b. Quantity demanded decreases as price increases
  3. a. Move downwards along the demand curve. Use an arrow pointing downwards along the demand curve to indicate the direction of movement. b. Label the new price as a lower value (e.g., $P_2$) and the new quantity demanded as a higher value (e.g., $Q_2$)
  4. a. The quantity demanded increased due to the price change
  5. When the price of ice - cream decreases by 50%, according to the cost - benefit principle, the benefit remains the same or seems greater while the cost is lower, so consumers buy more. In terms of opportunity cost, the opportunity cost of not buying ice - cream relative to other goods has increased, making ice - cream more attractive to purchase.