People Respond to Incentives quiz #2 Flashcards
People Respond to Incentives quiz #2
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Mobile users’ greater impatience means that They respond quickly to incentives and may switch to alternatives faster. A recurring theme in economics is that people Respond to incentives to make themselves better off. Based on the lesson, how are individuals and economies similar? Both respond to incentives and adjust behavior to improve outcomes. Which statement best describes incentives? Incentives motivate people to change their behavior. According to Adam Smith, what drives businesses to make their prices attractive to consumers? The pursuit of profit and competition. In the market, actions known as incentives affect The decisions and actions of buyers and sellers. Based on the lesson, how are individuals and economies similar? Both seek to exploit opportunities created by incentives. Which of the following is not a type of incentive? A random event with no impact on choices. A rational decision maker takes an action only if the Expected benefit exceeds the expected cost. Satisficing is the tendency of Choosing an option that is good enough rather than the optimal one. Rational rule for sellers Sell more if the marginal benefit exceeds the marginal cost. The insurance mechanism is based on an assumption that people Respond to incentives to reduce risk and protect themselves. Rational rule for employers Hire more workers if the marginal benefit of hiring exceeds the marginal cost. Managers who use the method of optimizing to make their decisions will attempt to choose The option that maximizes their benefit given available incentives.
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