Which of the following actions is consistent with the basic economic postulate (the guidepost) that incentives matter?
A) Consumers buy fewer potatoes when the price of potatoes increases.
B) A politician votes against a pay raise for himself because most of his constituents are strongly opposed to it and would vote against him in the next election.
C) Farmers produce less corn because corn prices have declined.
D) All of the above.
Correct Answer:
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