Which of the following best describes the concept 'incentive'?

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BlackTom AI · Accepted Answer

To tackle this question, let's first recall what an incentive means in economics and psychology. An incentive is something that motivates a person to alter their behavior because it provides a perceived benefit or reward.
Option a: 'A law that prevents a person from behaving in a certain way' describes a prohibition or regulation, not an incentive. It is more about deterrence or constraint than motivation through benefit.
Option b: 'A problem that all economic systems need to address' refers to a broad issue or challenge, such as scarcity or unemployment, rather than a motivating factor that drives behavior through a benefit.
Option c: 'A payment somebody makes for goods and services' is typically called a price or a transaction, not an incentive. While prices can influence behavior, this option focuses on the act of paying rather than the motivational effect of a benefit.
Option d: 'A positive benefit that motivates a person to change their behaviour in some way' aligns precisely with the standard definition of an incentive: something advantageous that encourages or prompts action or a change in behavior.
In summary, the other options describe concepts related to law, problems, or pricing, none of which capture the essence of an incentive as a positive motivator. The description in option d directly matches the accepted definition of an incentive and explains why it would motivate behavior.

MUF0061 Economics Unit 1 - Semester 1, 2025 Revision Quiz - Incentives and Behavioural Economics (8 - 10 minutes)

Which of the following best describes the concept 'incentive'?

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