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Consider the Following Statements: A

question 131

Multiple Choice

Consider the following statements: a.Consumers rent more DVDs from a video store that rents DVDs at a lower price than other rival video stores in the area.
B.Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment.
C.Farmers produce more cotton when its selling price falls.
Which of the above statements demonstrates that economic agents respond to incentives?


Definitions:

Just-noticeable Difference

The smallest change in intensity of a stimulus that can be detected.

Absolute Threshold

The minimum intensity of a stimulus at which it can be detected by an individual at least 50% of the time.

Difference Threshold

The minimum difference in stimulation that a person can detect 50% of the time, also known as just noticeable difference (JND).

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time.

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