Draw and label the economic model. UNIT 1:• If the price is increased to $3.50, how many coneswill most probably be sold?• Why can the price of an ice cream cone never beincreased to $5 in this community?The value of this graph as an economic toolis becoming clear! Now let's consider a casein which the relationship between variables isdirect, or positive. The table in Figure 1.7 presentsdata comparing ice cream cone sales to outdoortemperatures. When temperature increases, sodo ice cream cone sales, reflecting a directrelationship.QUESTIONStemperature and ice cream sales using the graph inthe sales axis. Decide on an appropriate scale for thetemperature axis. Use your new graph to answer thefollowing questions.1. If the temperature climbs to 38°C, how many icecream cones will be sold in your community? Markthis as point A on your graph.2. How many cones will be sold when the temperaturedrops to 8°C? Mark this as point B on your graph.3. What temperature would generate sales of 35 000cones? Mark this as point C on your graph.4. At what temperature would ice cream sales stopcompletely in your community? Explain.5. How does the slope of the curve help explain the kindof relationship that exists between temperature andice cream sales and between price and sales? Explain.Point onNumber ofCones SoldTemperatureGraph12°C20 00024°C50 000Y32°C70 000Figure 1.7 Ice cream cone sales relative totemperature.

Supply curve refers to the curve that shows the various quantities of a good or service supplied or…

The value of this graph as is becoming clear! Now let's consider a case in which the relationship between variables is direct, or positive. The table in Figure 1.7 presents data comparing ice cream cone sales to outdoor temperatures. When temperature increases, so do ice cream cone sales, reflecting a direct relationship. Number of Point on Temperature Cones Sold Graph 12°C 20 000 24°C 50 000 Y 32°C 70 000 Figure 1.7 lce cream cone sales relative to temperature.

The value of this graph as is becoming clear! Now let's consider a case in which the relationship between variables is direct, or positive. The table in Figure 1.7 presents data comparing ice cream cone sales to outdoor temperatures. When temperature increases, so do ice cream cone sales, reflecting a direct relationship. Number of Point on Temperature Cones Sold Graph 12°C 20 000 24°C 50 000 Y 32°C 70 000 Figure 1.7 lce cream cone sales relative to temperature.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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