Which of the following correctly describes incentives?
A) Incentives refer to the maximum price that a buyer is willing to pay for a good.
B) Incentives are rewards or penalties that motivate people to behave in a particular way.
C) Incentives are prices that are fixed by the government and not by market forces.
D) Incentives refer to the minimum price at which a seller is willing to sell a product.

Question

Quizplus · Accepted Answer

Incentives are rewards or penalties that motivate people to behave in a particular way. These can be monetary or non-monetary and can be used to encourage certain behaviors or discourage others. A and D both refer to prices, which is not a comprehensive definition of incentives. C is incorrect as incentives are not fixed by the government but rather by market forces.

Which of the Following Correctly Describes Incentives