The number of U.S. households with access to the Internet has grown is growing rapidly. Compared to 50 years ago, one would predict that when considering a major purchase, people today will gather:
A)less information because the Internet has lowered the cost of gathering information.
B)less information because the Internet has increased the benefit of gathering information.
C)more information because the Internet has lowered the cost of gathering information.
D)more information because the Internet has increased the cost of gathering information.

Question

The number of U.S. households with access to the Internet has grown is growing rapidly. Compared to 50 years ago, one would predict that when considering a major purchase, people today will gather:
A)less information because the Internet has lowered the cost of gathering information.
B)less information because the Internet has increased the benefit of gathering information.
C)more information because the Internet has lowered the cost of gathering information.
D)more information because the Internet has increased the cost of gathering information.

Quizplus · Accepted Answer

Applying the Incentive Principle, since the cost of gathering information has fallen, we would expect people today to gather more information today compared to 50 years ago.

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