Which of the Following Actions Is Consistent with the Basic

question 205

Multiple Choice

Which of the following actions is consistent with the basic economic postulate (the guidepost) that incentives matter?

• A) Consumers buy fewer potatoes when the price of potatoes increases.
• B) A politician votes against a pay raise for himself because most of his constituents are strongly opposed to it and would vote against him in the next election.
• C) Farmers produce less corn because corn prices have declined.
• D) All of the above.

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Definitions:

Rigorous

Characterized by a strict attention to detail; thorough and exacting.

Standard

A set of guidelines or principles established as a basis for comparison or measurement in quality assessment, production, and compliance.

Budget

A financial plan for a defined period, outlining an organization's projected revenues, expenses, and capital expenditures.

Standard Costs

Pre-determined or estimated costs of manufacturing, selling, or performing a service under normal conditions.