Clarice Must Choose Between Reading the Next Chapter in Her

question 101

Multiple Choice

Clarice must choose between reading the next chapter in her economics textbook or streaming the next episode of her favorite show.In her experience,she does well on exams,but even better when she reads the textbook.If she chooses to watch the show,what can be said of incentives?

• A) Adding a negative incentive (e.g. ,her parents block access to streaming services)would more likely result in Clarice choosing to read the textbook.
• B) Positive incentives are always more effective than negative incentives.
• C) Negative incentives are always more effective than positive incentives.
• D) Only marginal incentives play a role in this example.
• E) Clarice is motivated by the stronger of two negative incentives.

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Definitions:

Non-callable Debentures

Fixed-income securities that cannot be redeemed by the issuer before their specified maturity date.

Share Price

The existing market price for a solitary share of a company's equity, available for trading.

Required Rate of Return

It is the minimum return an investor expects to achieve by investing in a particular security or portfolio, factoring in various risks and the time value of money.

Share of Stock

A share of stock represents ownership in a corporation, giving the shareholder a claim to a part of the company’s assets and earnings.