Milton Friedman argued that consumers are more likely to alter their behavior based on:

• A. government regulations
• B. changes in relative prices
• C. social norms
• D. advertising campaigns

Answer: (B)

Verified step by step guidance

1. Understand the concept of consumer behavior in microeconomics, which often depends on incentives and constraints faced by consumers.
2. Recognize that Milton Friedman emphasized the role of economic incentives, particularly how consumers respond to changes in relative prices rather than external factors like regulations or social norms.
3. Recall that 'relative prices' refer to the price of one good or service compared to another, influencing consumers' choices by making some options more or less attractive.
4. Analyze why changes in relative prices are more effective in altering consumer behavior: when the price of a good rises or falls relative to others, consumers adjust their consumption to maximize utility.
5. Conclude that among the options given, changes in relative prices are the primary driver of consumer behavior changes according to Friedman's economic perspective.