Which of the Following Is Most Clearly Consistent with the Basic

question 133

Multiple Choice

Which of the following is most clearly consistent with the basic postulate of economics regarding the reaction of people to a change in incentives.

• A) Farmers produce fewer bushels of wheat in response to an increase in the price of wheat.
• B) People will buy more milk at a price of $2 per gallon than at $1 per gallon.
• C) People will buy less gas if the price of gas increases by $.20 per gallon.
• D) People will consume more beef if the price increases from $1 to $2 per pound.

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Definitions:

Continuous Probability Distribution

A function that describes the likelihood of any outcome within a continuous range of outcomes occurring.

Poisson Distribution

A statistical distribution describing the probability of a given number of events happening in a fixed interval of time or space, assuming events occur with a constant mean rate and independently of the time since the last event.

Mean

The average of a set of numbers, calculated by dividing the sum of all the numbers by the count of numbers.

Poisson Probability Tables

Tables that provide the probabilities of different numbers of events happening in a fixed interval of time or space, assuming these events occur with a known constant rate and independently of the time since the last event.