An incentive is
A)when people make rational choices by comparing costs and benefits.
B)what you must give up to get something.
C)a reward or a penalty that encourages or discourages an action.
D)a choice made on the margin.
E)a good or service that satisfies wants.

Question

Quizplus · Accepted Answer

An incentive is a reward or a penalty that encourages or discourages an action. Therefore, option C is the most appropriate choice as it directly defines what an incentive is. Option A defines rational decision-making, option B defines opportunity cost, option D defines marginal decision-making, and option E defines goods and services that satisfy wants, but not necessarily incentives.

An Incentive Is