Differentiate between positive and negative incentives
Positive incentives either increase benefits or reduce costs and thus result in an increased level of the related activity or behavior. Negative incentives either reduce benefits or increase costs, resulting in a decreased level of the related activity or behavior.
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The Ricardo-Barro effect refers to how ________ in response to a government budget ________
A) investment demand changes; deficit B) investment demand and saving supply change; surplus C) investment demand changes; surplus D) saving supply changes; deficit E) government budget changes; surplus or deficit
Every cost-minimizing producer is profit-maximizing.
Answer the following statement true (T) or false (F)
When a firm is operating at its minimum efficient scale, its short-run average total cost of production is minimized
a. True b. False
Rules advocates believe that the central bank should change interest rates in an attempt to fine tune the economy
a. True b. False Indicate whether the statement is true or false