Unit 8 - Understanding Economic Incentives

What are economic incentives primarily used for?

• To increase taxes

• To entertain people

• To influence people's choices

• To confuse consumers

Which of the following is a positive economic incentive?

• A speeding ticket

• A discount coupon

• A library fine

• A parking ticket

What is a negative economic incentive?

• A free item

• A discount

• A fine

• A reward

Why do businesses offer economic incentives?

• To encourage people to spend money

• To increase competition

• To reduce their supply costs

• To discourage customers from spending money

Which of the following is NOT an example of a positive economic incentive?

• A free upgrade

• A sale

• A speeding ticket

• A buy-one-get-one-free deal

Why do government agencies use economic incentives?

• To encourage irresponsible behavior

• To reduce public spending

• To promote certain behaviors

• To increase taxes

What is the purpose of library fines?

• To increase library membership

• To encourage people to return books on time

• To discourage people from using the library

• To encourage people to keep books longer

Why do police officers issue speeding tickets?

• To keep roads unsafe

• To discourage safe driving

• To encourage safe driving

• To make drivers feel afraid to drive

What is the effect of parking tickets?

• To encourage illegal parking

• To keep parking spaces open for the handicapped

• To increase traffic congestion

• To reduce parking availability

Which of the following is a reason people might not respond to an incentive?

• They don't value the incentive

• All of the above

• They are unaware of the incentive

• They don't understand the incentive