According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.This result is an example of which principle of economics?
A) People face tradeoffs.
B) The cost of something is what you give up to get it.
C) Rational people think at the margin.
D) People respond to incentives.

Question

Quizplus · Accepted Answer

This result is an example of the principle of incentives. Drivers who are paid per passenger have an incentive to take on as many passengers as possible to increase their pay, leading to higher productivity.

According to a Recent Study of Chilean Bus Drivers,drivers Who