Which of the following best defines a purposive incentive in economics?

• A. An incentive that is based on social relationships and the desire for acceptance.
• B. An incentive that motivates individuals to participate in an activity because they believe in the purpose or goals of the activity.
• C. An incentive that results from government regulations and legal requirements.
• D. An incentive that provides material rewards such as money or goods.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of incentives in economics. Incentives are factors that motivate individuals to take certain actions or behave in specific ways.
2. Step 2: Recognize different types of incentives: material incentives (tangible rewards like money or goods), social incentives (based on social relationships and acceptance), legal incentives (stemming from laws and regulations), and purposive incentives.
3. Step 3: Define purposive incentives specifically. These are incentives that motivate individuals because they believe in the purpose, goals, or values behind an activity, rather than for material or social rewards.
4. Step 4: Compare the given options to the definition of purposive incentives. Identify which option aligns with motivation driven by belief in the purpose or goals of the activity.
5. Step 5: Conclude that the best definition of a purposive incentive is the one that highlights motivation based on belief in the purpose or goals of the activity.