Which Statement About Incentives Is TRUE

question 99

Multiple Choice

Which statement about incentives is TRUE?

• A) Each of us is motivated by the same incentive.
• B) Each of us is motivated by different incentives.
• C) Incentives can be manipulated with precision.
• D) Price is the only relevant economic incentive.

---

Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to a change in price.

Tax

A mandatory financial charge imposed by a governmental organization on individuals or entities to fund public expenditures.

Slightly Inelastic

A situation where a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Demand for Product

The total amount of a product or service that consumers are willing and able to purchase at various price levels, at a given time.