Kelly Works at an Ice Cream Shop and Observes That

question 43

Multiple Choice

Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature. If Kelly is using the scientific method to better understand ice cream buying habits, her next step is to

• A) conclude definitively that people buy more ice cream when the temperature rises.
• B) state her findings as a well-tested economic principle.
• C) use the observed data to form a hypothesis about ice cream buying behavior.
• D) throw out the data if it does not show a perfect relationship between buying habits and the other information she has collected.

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Definitions:

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies as output quantity changes.

Monopolistically Competitive

A commercial framework where a large number of businesses market goods that are comparable, but not exact duplicates, providing them with a bit of control over market conditions.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price-taking behavior.

Horizontal

Refers to something that is parallel to the horizon, often used in contrast with vertical; in economics, it may pertain to mergers between companies at the same stage of production.