Which example represents a bad incentive?
A) charging drivers a gasoline tax to fund green energy projects
B) offering factories tax credits for reducing pollution
C) rewarding students for studying and earning high grades
D) raising homeowners' property taxes because of home improvements

Question

Quizplus · Accepted Answer

Raising homeowners' property taxes because of home improvements is a bad incentive because it discourages homeowners from making improvements to their property, which in turn may negatively impact the economy and the housing market. The other options are examples of good incentives as they encourage behaviors that have positive societal and environmental impacts.

Which Example Represents a Bad Incentive