The Basic Postulate of Economics Indicates That Changes in Incentives

question 202

Multiple Choice

The basic postulate of economics indicates that changes in incentives influence

• A) the actions of producers but not consumers.
• B) the actions of consumers but not producers.
• C) the choices of individuals only when they buy and sell goods in the marketplace.
• D) the choices of individuals with regard to a wide range of activities, including those generally perceived as social or political.

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Definitions:

Concentrated Interest Groups

Interest groups that represent a specific sector or group with focused, often intense, advocacy objectives and strategies.

Income Transfer Programs

Government initiatives designed to redistribute wealth by transferring income, often from wealthier taxpayers to those in greater need.

Means-tested Programs

Governmental assistance programs where eligibility is determined based on the applicant's income and assets.

Rent-seeking

The practice of gaining economic benefits through manipulation or exploitation of the political environment, rather than through productive economic activity.