Week 2 Assignment

Name : Daren Timberli Putra Nosa

NRP : 160323054

1. Demand and Supply Movements along the Curve:

- When the price of chili rises, demand tends to decrease, shifting the demand curve
upwards.
- When the price of chili falls, demand tends to increase, shifting the demand curve
downwards.

Demand Shift:
If the government encourages people to consume more chili for health reasons, this will
shift the demand curve to the right due to increased demand at every price level.

Supply Shift:
If floods damage chili crops, the supply of chili will decrease, causing the supply curve to
shift to the left due to less supply at every price level.

2. Explanation:
Movement along the Demand and Supply Curves:
- When the price of a product changes, it results in movement along the demand or
supply curve.
- If the price increases, for example, demand tends to decrease, which is reflected in an
upward movement along the demand curve. Conversely, if the price decreases, demand
tends to increase, which is reflected in a downward movement along the demand curve.

Demand Shift:
- Demand shift occurs when factors outside of price influence the quantity demanded of
a product at each price level.
- For example, if the government encourages people to consume more chili peppers due
to their health benefits, this will shift the entire demand curve to the right because of
increased demand at each price level.

Supply Shift:
- Supply shift occurs when factors other than price influence the quantity offered of a
product at each price level.
- For instance, if floods damage chili crops, the supply of chili peppers will decrease,
causing the overall supply curve to shift to the left due to less supply at each price level.