A Decrease in the Price of Ice Cream Is Likely

question 146

Multiple Choice

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.

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Definitions:

Disposable Income

The disposable financial resources for households after income taxes have been paid.

Disposable Income

The economic resources households are left with for spending and saving after income tax charges.

Autonomous Consumption

The level of consumption that occurs when income levels are zero, reflecting basic consumption needs that do not depend on income.

Autonomous Consumption

Autonomous consumption is the level of consumption that occurs when income levels are zero, reflecting the basic level of consumption that is needed for survival.