Which of the given options arranges the following sentences in the most logical sequence to form a meaningful paragraph?

1. It states that, all else being equal, as the price of a good increases, the quantity demanded decreases.
2. Consumers substitute more expensive goods with cheaper alternatives, reducing the quantity demanded at higher prices.
3. This negative relationship between price and demand is due to the substitution and income effects.
4. Additionally, as prices rise, consumers' purchasing power is diminished, leading them to buy less.
5. The law of demand is one of the fundamental principles of economics and is often depicted using a downward-sloping demand curve.

Question

Prepp Team · Accepted Answer

Ordering Sentences for the Law of Demand Paragraph

The question asks us to arrange a set of sentences about the law of demand into the most logical sequence to form a coherent paragraph. Let's analyze each sentence to understand its role:

Sentence 5: "The law of demand is one of the fundamental principles of economics and is often depicted using a downward-sloping demand curve." This sentence serves as an excellent introduction, defining the law of demand and mentioning its common graphical representation.
Sentence 1: "It states that, all else being equal, as the price of a good increases, the quantity demanded decreases." This sentence directly follows the introduction by stating the core principle of the law of demand itself – the inverse relationship between price and quantity.
Sentence 3: "This negative relationship between price and demand is due to the substitution and income effects." This sentence acts as a bridge, explaining the underlying reasons (substitution effect and income effect) for the relationship described in sentence 1.
Sentence 2: "Consumers substitute more expensive goods with cheaper alternatives, reducing the quantity demanded at higher prices." This sentence elaborates on the substitution effect mentioned in sentence 3, explaining how consumers react to price changes by switching goods.
Sentence 4: "Additionally, as prices rise, consumers' purchasing power is diminished, leading them to buy less." This sentence elaborates on the income effect mentioned in sentence 3, explaining how rising prices affect consumers' ability to buy.

Building the Logical Sequence

Based on the analysis, the most logical flow starts with introducing the concept, stating the principle, explaining the reasons, and then detailing those reasons:

Sentence 5 introduces the topic.
Sentence 1 states the law.
Sentence 3 introduces the reasons behind the law.
Sentence 2 explains the first reason (substitution effect).
Sentence 4 explains the second reason (income effect).

Therefore, the sequence 5-1-3-2-4 creates the most meaningful and logically structured paragraph explaining the law of demand and its causes.

Resulting Paragraph

The sentences arranged in the logical order 5-1-3-2-4 form the following paragraph:

"The law of demand is one of the fundamental principles of economics and is often depicted using a downward-sloping demand curve. It states that, all else being equal, as the price of a good increases, the quantity demanded decreases. This negative relationship between price and demand is due to the substitution and income effects. Consumers substitute more expensive goods with cheaper alternatives, reducing the quantity demanded at higher prices. Additionally, as prices rise, consumers' purchasing power is diminished, leading them to buy less."