Which one of the following states a central element of the economic way of thinking?
A) Scarce goods are priceless.
B) Incentives matter--human choice is influenced in predictable ways by changes in personal costs and benefits.
C) The realism of the assumptions is the best test of an economic theory.
D) When deciding how to allocate time, the concept of opportunity cost is meaningless.

Question

Quizplus · Accepted Answer

In the economic way of thinking, incentives are crucial as they influence human behavior by altering the costs and benefits associated with different choices.

Which One of the Following States a Central Element of the Economic