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Consider the Following Statements: A

question 131

Multiple Choice

Consider the following statements: a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
B. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
C. Citrus growers produce more oranges when the selling price of oranges falls.
Which of the above statements demonstrates that economic agents respond to incentives?

Learn about the marginal propensity to save (MPS) and its significance.
Interpret how changes in income affect consumption and saving.
Analyze the consumption function and its determinants.
Recognize how consumption and saving behavior changes with changes in income.

Definitions:

Insider Trading

The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.

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