An Incentive Is

question 46

Multiple Choice

An incentive is

• A) a reward or a penalty that encourages or discourages an action.
• B) when people make rational choices by comparing costs and benefits.
• C) what you must give up to get something.
• D) a choice is made on the margin.
• E) a good or service that satisfies wants.

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Definitions:

Demand and Supply

The fundamental economic concept that describes the amount of a specific good or service that is available to consumers and the desire of consumers for it, considered as functions of its price.

Consumer Incomes

The total amount of money earned by consumers from various sources like wages, investments, and government benefits, which affects their purchasing power and economic behavior.

Normal Good

A good for which demand increases as the income of the consumer increases, all other factors being equal.

Substitutes

Products or services that can replace each other in use, where an increase in the price of one leads to an increase in demand for the other.