David sells Sno-cones and uses the money earned to buy pizzas. Last year Sno-cones sold for $1 each, and pizzas were $10 each. This year David finds that he can only charge $0.50 per Sno-cone, but that the price of a pizza has climbed to $12. a . If
David asks the government to intervene to maintain his purchasing power, what price would the government have to set for Sno-cones? Explain. b. How would the new, government-imposed Sno-cone price affect the Sno-cone market?
a . To maintain 100 percent parity, a price of $1.20 should be chosen. Why? Last year it took 10 Sno-
cones to buy one pizza . If pizza now costs $12 and we want to buy it with 10 Sno-cones, then each
Sno-cone should be priced at $1.20.
b. At a price of $1.20, an excess supply occurs.
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Indicate whether the statement is true or false
Which of the following statements is true of the scientific method?
A) The scientific method may not reveal a "true" model of the world. B) The scientific method does not require the models to be tested with data. C) The scientific method used by economists and scientists is independent of empiricism. D) The scientific method can help develop accurate models even when data are unavailable.