A decrease in the price of ice cream is likely to cause:
A. an increase in the demand for ice cream cones due to a change in the price of a complementary good.
B. an increase in the demand for ice cream cones due to a change in the price of a substitute good.
C. an increase in the demand for ice cream cones due to a change in the preferences of consumers.
D. a decrease in the demand for ice cream cones due to a change in the price of a related good.
A. an increase in the demand for ice cream cones due to a change in the price of a complementary good.
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Refer to Figure 17-6. Under Scheme I
A) workers signal their productivity to the firm by consistently selling above 30 vacuum cleaners. B) the incentive to increase productivity only occurs for sales of fewer than 20 vacuum cleaners or more than 30 vacuum cleaners. C) workers compete with each other to see who can sell more than 20 vacuum cleaners in the shortest possible time. D) workers have no incentive to sell more than 30 vacuum cleaners.
The incidence of a tax:
A. falls entirely on suppliers if supply is perfectly elastic. B. falls entirely on suppliers if demand is perfectly inelastic. C. falls entirely on consumers if supply is perfectly elastic. D. falls entirely on consumers if demand is perfectly elastic.
The prices at which goods trade are determined by their costs of production
Indicate whether the statement is true or false
What is the law of comparative advantage, and why is it important in international trade?