An Incentive Is

question 42

Multiple Choice

An incentive is:

• A) the marginal cost of engaging in a course of action.
• B) the marginal benefit of engaging in a course of action.
• C) something that changes the trade-offs people face.
• D) rational behavior that involves thinking on the margin.

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Definitions:

Marginal Utility

The extra pleasure or advantage (utility) a person receives from using an additional unit of a product or service.

Marginal Utility

The additional satisfaction or benefit received from consuming one more unit of a good or service.

Movie Rental

The practice of paying a fee to borrow a film for a limited period, traditionally through physical stores, or digitally via online platforms.

Choice Set

The collection of all possible options available to a consumer when making a decision.