Suppose That the Owner of a Local Ice Cream Store

question 13

Multiple Choice

Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop) . This type of behavior is ________.

• A)exactly the type of behavior that Keynes believed most firms exhibit
• B)known as meeting demand
• C)inconsistent with the key assumption upon which the basic Keynesian model is built
• D)free from menu costs

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Definitions:

Naturalistic Observation

An investigational approach where observers watch subjects in their inherent environments without any influence from the observer.

Survey Research

A method of gathering information from a sample of individuals through their responses to questions.

Applied Research

Research focused on finding practical solutions to real-world problems.

Laboratory Research

A method of scientific investigation conducted in a controlled environment allowing for precise measurement and manipulation of variables.