5
QuizMultiple Choice

Elasticity and Incentives

Question 5 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27

Which is an example of a negative incentive for producers?

Answer
A
a chance to make more money
B
a special sale at a department store
C
a coupon clipped from a newspaper
D
a sharp increase in production costs

Explanation

A negative incentive discourages producers from making or selling goods. A sharp increase in production costs makes it less profitable to produce, so it can discourage production. The chance to make more money is a positive incentive, while a sale and a coupon are incentives for consumers.

AI-written and checked against the verified answer.

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