I Scream for Ice Cream Sells Specialty Ice Cream in Three

question 11

Multiple Choice

I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road, Peanut Butter, and Fruity Tooty. It sold 10,000 gallons last year. For every five gallons of ice cream sold, one pound is Fruity Tooty and the remainder is split evenly between Peanut Butter and Rocky Road. Fixed costs for I Scream For Ice Cream are $38,125 and additional information follows: The weighted average contribution margin per pound for the three products of I Scream For Ice Cream is

• A)$76.25.
• B)$0.40.
• C)$15.25.
• D)$3.05.

Outline the impact of various incentive structures on adverse selection and moral hazard.

Distinguish between different types of economic mechanisms and their applications in real-world scenarios.

Appreciate the use of signal theory in labor markets and various forms of market signaling.

Grasp the significance of aligning interests between employers and employees via contract design.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a given period.

Price Change

A variation in the cost of goods or services over time, either increasing or decreasing based on market conditions.

Price Elasticity

Price elasticity measures how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified period.