Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 2R, Problem 8MCQ
To determine
The factor which causes the price of chocolate ice cream to fall.
Expert Solution & Answer
Explanation of Solution
The given options:
- A drought that reduces the number of dairy cows causes the inputs required to produce ice cream to fall and thus will lead to a fall in the supply of ice cream.<
- A report which concludes that chocolate has significant health benefits encourages health-conscious people and they will demand more and thus will lead to a higher demand for chocolate ice cream.<
- An increase in the price of substitutes (vanilla ice cream) encourages people to consume less-expensive ice cream. Thus people will prefer chocolate ice cream over costly vanilla ice cream and as the result, the demand for chocolate ice cream will increase.
- New freezer technology that lowers the costs of ice cream production will encourage the suppliers to produce more and thus will lead to a higher supply of ice cream.<
- Ice cream toppings are a complementary good for ice cream production. A fall in the price of a complementary product leads to a higher demand for the original product. So, a fall in the price of ice cream toppings will cause the demand for ice cream to increase.
So, a new technology that lowers the costs of ice cream production causes the supply of ice cream to increase and in turn reduces the price of the ice cream. A higher supply results in a lower price for the product.
Therefore, a new freezer technology will lead to a fall in the price of chocolate ice cream.
Option “d” is correct.
Economics Concept Introduction
Two possible factors will lead to a fall in the price of chocolate ice cream:
- An increase in the supply of ice cream and
- A fall in demand for ice cream
Chapter 2R Solutions
Krugman's Economics For The Ap® Course
Ch. 2R - Prob. 1MCQCh. 2R - Prob. 2MCQCh. 2R - Prob. 3MCQCh. 2R - Prob. 4MCQCh. 2R - Prob. 5MCQCh. 2R - Prob. 6MCQCh. 2R - Prob. 7MCQCh. 2R - Prob. 8MCQCh. 2R - Prob. 9MCQCh. 2R - Prob. 10MCQ
Ch. 2R - Prob. 11MCQCh. 2R - Prob. 12MCQCh. 2R - Prob. 13MCQCh. 2R - Prob. 14MCQCh. 2R - Prob. 15MCQCh. 2R - Prob. 16MCQCh. 2R - Prob. 17MCQCh. 2R - Prob. 18MCQCh. 2R - Prob. 19MCQCh. 2R - Prob. 20MCQCh. 2R - Prob. 21MCQCh. 2R - Prob. 22MCQCh. 2R - Prob. 23MCQCh. 2R - Prob. 24MCQCh. 2R - Prob. 25MCQCh. 2R - Prob. 1FRQCh. 2R - Prob. 2FRQCh. 2R - Prob. 3FRQCh. 2R - Prob. 1CTQCh. 2R - Prob. 2CTQCh. 2R - Prob. 3CTQ
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