Asked by
Gillian Tamia
on Dec 12, 2024Verified
Which of the following is often referred to as the basic postulate of economics?
A) Individuals act only out of selfish motives.
B) Incentives matter--individuals respond in predictable ways to changes in personal costs and benefits.
C) The accuracy of the assumptions is the best test of an economic theory.
D) The value of a good is objective; it is equal to the cost of producing the good.
Basic Postulate
An underlying assumption or principle that serves as a foundation for a theory, system, or statement.
Incentives
Rewards or penalties that motivate individuals or entities to act in certain ways, often used in economic policies, business strategies, and workplace productivity measures.
Economic Theory
A set of principles and methodologies that explain how economies operate, exploring the production, distribution, and consumption of goods and services.
- Understand the fundamental principle of economics regarding the importance of incentives.
Verified Answer
NL
Learning Objectives
- Understand the fundamental principle of economics regarding the importance of incentives.