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William Gregg owned a mill in South Carolina. In December 1862, he placed a notice in the Edgehill Advertiser announcing his willingness to exchange cloth for food and other items. Here is an extract: buy bacon and trade it for cloth because they could buy 8 yards of cloth for only $1.60, and use that cloth to obtain a bushel of salt. The opportunity cost of good A in terms of good B is equal to the ratio of the money price of good A to the money price of good B. The opportunity cost of a hot dog in terms of hamburgers is the ratio of the money price of a hot dog to the money price of a hamburger. In April 2014, the money price of a litre of milk was $2.01 and the money price of a litre of gasoline was $1.30. The real price of a litre of gasoline in terms of milk was 0.65 litres of milk. 1) The law of demand states that, other things remaining the same, A) the higher the price of a good, the smaller is the quantity demanded. 2) Which one of the following events shifts the demand curve for grape jelly to the right? A) an increase in income if grape jelly is a normal good 3) The demand curve slopes downward to the right because C) of the law of demand.