Author Question: At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by ... (Read 117 times)

laurencescou · **on:** Jun 29, 2018

At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that

A) there are more people who like vanilla ice cream than there are people who like chocolate ice cream.
B) the demand for chocolate ice cream is inelastic.
C) the demand for chocolate ice cream is elastic.
D) None of the above answers is correct.

Question 2

In the long run, the nominal exchange rate

A) is a monetary phenomenon, determined by the quantities of money in two countries.
B) is not related to the real exchange rate, since the real exchange rate is the true value of currencies.
C) will not change if prices in one country change, since prices are nominal variables.
D) is fixed by world central banks, as indicated by the fixed exchange rate system.