How People Respond to Incentives

Suppose you are visiting the local Big Y supermarket to purchase groceries. At the grocery, you see an advertisement for a store rewards card. The card offers gasoline discounts that are tied

to the amount of money that a consumer spends at the store. The advertisement explains that the discounts accrue after a minimum purchase of $50. You decide to sign up for the card, in spite

of the fact that you had only planned to buy $47 worth of groceries. Why is this decision rational? Explain, using a fundamental principle of economics, why you would make this decision.

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