What do economists call something that encourages an action by increasing its benefits or reducing its costs?
b. a market externality
a. a positive incentive
c. a rational choice
d. an economic good
a. a positive incentive
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Today, unions play a larger role in Europe than they do in the U.S
a. True b. False Indicate whether the statement is true or false
Suppose the market demand curve is given by Qd = 80 - 10P, and the market supply curve is given by Qs = 10 + 15P. What is the equilibrium price and quantity?
A. P* = $2.80 and Q* = 54 B. P* = $2.80 and Q* = 52 C. P* = $2.60 and Q* = 54 D. P* = $3.00 and Q* = 55
A trade barrier whereby foreign firms agree to limit the quantity of exports to a particular country is called a:
A) quota. B) tariff. C) nontariff barrier. D) voluntary export restriction.
In a principal-agent problem, if the contract used leads to the maximum of the principal's and agent's combined value (profits, payoffs), we can say that this contract features
A) inefficiency in production, since only the principal's profits should be maximized. B) inefficiency in production, since only the agent's payoffs should be maximized. C) efficiency in production. D) inefficiency in production, since the agent's payoffs should be maximized and the principal's profits should be minimized.