A basic belief of economics is that
A) people always, and in every case, respond to economic incentives.
B) in general, people respond to economic incentives.
C) history shows that tax incentives rarely work.
D) people do not respond to changes in costs and prices.

Question

Quizplus · Accepted Answer

Economics is based on the assumption that people generally respond to economic incentives. This means that when costs or prices change, people are likely to change their behavior accordingly. While there may be exceptions, this underlying belief serves as a foundation for many economic theories and models.

A Basic Belief of Economics Is That