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?

• A) a only
• B) b only
• C) c only
• D) a and b
• E) a, b, and c

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Definitions:

Change Channels

The action of switching or modifying pathways or methods, often used in the context of media consumption or management strategies.

Instinctive Drift

The tendency of an animal to revert to instinctual behaviors that interfere with a conditioned response.

Conditioned Taste Aversions

This refers to the phenomenon where an organism, after consuming a particular food and subsequently experiencing illness, develops a lasting aversion to that food.

Biological Constraints

Limitations on learning processes that are determined by the nature of an organism's biological makeup.