Which of the following economic actions demonstrates a negative incentive?
(1 point)
• An employee is fired.
• An item is put on sale.
The cost of production decrease.
• The board of a company invests more.
An employee is fired.
Which government action would interfere with free trade?
(1 point)
O increasing taxes on domestic producers
O charging duty taxes on foreign goods
O adding a value-added tax to consumer goods
O giving contracts to factories in other countries
Increasing taxes on domestic producers.
What is an effect of the division of labor?
(1 point)
O Consumers are offered better choices.
Investors pay more to start companies.
O Producers work more quickly.
O Employees learn how to produce an entire product.
Employees learn how to produce an entire product.
Which is true of how the market sets prices?
(1 point)
Prices are set by the expected sales.
Prices are set by how much consumers will pay.
Prices are set by the size and location of market outlets.
• Prices are set by doubling the equilibrium price.
Prices are set by how much consumers will pay.
Imagine that the amount of milk being purchased in the United States suddenly decreased.
Which of the following is the most likely cause?
(1 point)
• increased price of milk
• increased supply of milk
• decreased demand for milk
O decreased competition for milk
Decreased demand for milk.
A negative incentive is an action or event that discourages individuals or organizations from behaving in a certain way. Out of the options given, the economic action that demonstrates a negative incentive is when an employee is fired.
To arrive at this answer, we need to understand what a negative incentive is. Incentives are factors that influence people's actions or decisions by offering rewards or imposing penalties. Positive incentives encourage certain behaviors, while negative incentives discourage them.
An employee being fired can be considered a negative incentive as it serves as a penalty for not meeting job expectations or exhibiting undesirable behavior. Getting fired can have various negative consequences for the employee, including job loss, financial difficulties, and damage to their professional reputation.
On the other hand, the remaining options demonstrate positive incentives or actions that encourage desired behavior:
- Putting an item on sale: This is a positive incentive as it encourages consumers to purchase the item by reducing its price, attracting more buyers, and potentially increasing sales.
- The cost of production decreases: This can be seen as a positive incentive as it reduces the expenses associated with producing goods or services, potentially leading to higher profits for the company.
- The board of a company invests more: This action suggests the board is confident about the company's prospects and is willing to allocate additional resources for expansion or improvement. Investing more can be seen as a positive incentive as it signals growth and potential profitability.
Therefore, based on the given options, the economic action that demonstrates a negative incentive is when an employee is fired.