Which of the following is not consistent with the basic postulate of economics that incentives matter?
A) Farmers produce fewer bushels of wheat in response to an increase in the price of wheat.
B) A politician votes against a proposal because most of his constituents oppose it.
C) People drive less because of higher gas prices.
D) People buy more milk in response to a reduction in the price of milk.

Question

Quizplus · Accepted Answer

Incentives matter in economics, meaning that people respond to changes in costs and benefits. If the price of wheat increases, farmers would typically produce more, not fewer, bushels of wheat, as they are incentivized by the higher price.

Which of the Following Is Not Consistent with the Basic