27
QuizMultiple Choice

Elasticity and Incentives — Quiz

Question 27 • Personal Finance and Economics

Which is an example of a negative incentive for producers?

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

Explanation

A negative incentive makes producing goods less attractive or more difficult. A sharp increase in production costs reduces a producer’s potential profit, so it discourages production. A sale, a chance to earn more money, and a coupon are not negative incentives for producers.

AI-written and checked against the verified answer.

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