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.

Question

Quizplus · Accepted Answer

An incentive is defined as a reward or penalty that encourages or discourages an action. This is the best choice because it directly reflects the definition of an incentive. Choices B, C, D, and E are all economic concepts, but they do not fully capture the definition of an incentive.

An Incentive Is