rewards or punishments that encourage people to do or not to do certain things
question
price ceiling
answer
a maximum allowed price for a good or service
question
price floor
answer
a minimum allowed price for a good or service
question
produce
answer
to make a good or provide a service
question
Which statement best explains how elasticity and incentives work together?
a)An elastic good, such as a game, is more likely to respond to incentives.
b)An inelastic good, such as a game, is more likely to respond to incentives.
c)An elastic good, such as a game, is less likely to respond to incentives.
d)An inelastic good, such as a game, is less likely to respond to incentives.
answer
a)An elastic good, such as a game, is more likely to respond to incentives.
question
Which statement best describes incentives?
a)Incentives are mostly positive.
b)Incentives are mostly negative.
c)Incentives can be positive or negative.
d)Incentives are neither positive nor negative.
answer
c)Incentives can be positive or negative.
question
A(n) _________ is a reward or punishment that encourages people to behave in certain ways.
answer
incentive
question
A pair of stylish sneakers could be considered a _________ because it is not a necessity.
answer
want
question
Price controls on goods can be set by
answer
governments
question
The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price. What will most likely result from this price control?
answer
The demand for bread will fall, which could result in an excess supply.
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