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Consider the Following Statements

question 216

Multiple Choice

Consider the following statements:
a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area.
b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment.
c. Firms produce more of a particular DVD when its selling price rises.
Which of the above statements demonstrates that economic agents respond to incentives?


Definitions:

NYSE

New York Stock Exchange; a leading global stock exchange where shares of public companies are bought and sold.

Dealer Market

A dealer market is a financial market mechanism in which dealers buy and sell securities for their own accounts, providing liquidity and pricing to the market.

Over-the-counter (OTC) Market

A decentralized market where securities are traded directly between two parties without the supervision of an exchange.

Real Estate Market

The market segment in which land and the buildings on it are bought, sold, or rented, involving residential, commercial, and industrial properties.

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