In the 1800s, the federal government paid railroad companies for each mile of track built. This payment scheme created incentives for railroad companies to lay track:

Question

BlackTom AI · Accepted Answer

Re-expressing the scenario helps frame why the incentives shaped the outcome. When payment is granted per mile of track constructed, the amount of money earned scales with total miles laid, not with speed, efficiency, or quality of materials by itself.
Option A: 'as slowly as possible.' This is not tied to the per-mile payment structure. Speed of construction has no bearing on the payment rate, so this option misidentifies the driver of behavior.
Option B: 'between points A and B using the most direct route.' A direct route minimizes the distance and, therefore, the number of miles built. Since the government pays by mile, building a shorter, more direct route would reduce revenue for the company, making this option inconsistent with the incentive.
Option C: 'between points A and B using the most indirect route.' This aligns with the per-mile payment incentive. By choosing longer, winding paths that add unnecessary miles, railroad companies could maximize the total miles constructed and thus increase their earnings, even if the route is inefficient.
Option D: 'using the best materials possible.' While material quality matters for strength and durability, the per-mile payment scheme focuses on the length of track, not necessarily the quality or durability of materials. This option fails to capture the primary incentive created by paying per mile and could be pursued alongside average or high-quality materials, but it does not explain the motive to maximize miles.
In summary, the per-mile payment structure encourages maximizing the number of miles laid, which would often mean opting for longer, more indirect routes rather than shorter, direct ones, making Option C the most consistent with the incentive.

ECON 201 Quiz 1: Chs 1 and 2 on Key Ideas & the PPF

In the 1800s, the federal government paid railroad companies for each mile of track built. This payment scheme created incentives for railroad companies to lay track:

查看解析

登录即可查看完整答案

类似问题

Match each scenario with one of the following choices: Perverse Incentives, Moral Hazard, "Law" of Unintended/Unforeseen Consequences.

All are true except

Regarding the use of incentives as an influence on decision-making, which of the following is correct?

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

Regarding the use of incentives as an influence on decision-making, which of the following is correct?

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

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

Regarding the use of incentives as an influence on decision-making, which of the following is correct?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单