117. The Incentive Principle states that a person: A. is more likely to take an action if its cost increases. B. is more likely to take an action if its benefit increases. should take an action if its cost increases. should take an action if its benefit increases. The Incentive Principle states that a person is more likely to take an action if its benefit rises, and less likely to do something if its cost rises. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 01 Easy Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Topic: Normative Economics Versus Positive Economics 118. The Incentive Principle is an example of: an economic pitfall. the benefits of an action. a positive economic principle. a normative economic principle. The Incentive Principle predicts how people will behave. The Principle states how they should behave. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 01 Easy Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Normative Economics Versus Positive Economics 119. According to the Incentive Principle, people will be less likely to smoke if the government: A. increases taxes on devices such as nicotine patches. B. increases taxes on cigarettes, effectively raising the price. subsidizes hospitals treating lung disease. invests more money in cancer research. The Incentive Principle states that a person is more likely to take an action if its benefit rises, and less likely to do something if its cost rises. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 02 Medium Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Topic: Normative Economics Versus Positive Economics
117. The Incentive Principle states that a person: A. is more likely to take an action if its cost increases. B. is more likely to take an action if its benefit increases. should take an action if its cost increases. should take an action if its benefit increases. The Incentive Principle states that a person is more likely to take an action if its benefit rises, and less likely to do something if its cost rises. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 01 Easy Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Topic: Normative Economics Versus Positive Economics 118. The Incentive Principle is an example of: an economic pitfall. the benefits of an action. a positive economic principle. a normative economic principle. The Incentive Principle predicts how people will behave. The Principle states how they should behave. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 01 Easy Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Normative Economics Versus Positive Economics 119. According to the Incentive Principle, people will be less likely to smoke if the government: A. increases taxes on devices such as nicotine patches. B. increases taxes on cigarettes, effectively raising the price. subsidizes hospitals treating lung disease. invests more money in cancer research. The Incentive Principle states that a person is more likely to take an action if its benefit rises, and less likely to do something if its cost rises. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 02 Medium Learning Objective: Explain and apply the Incentive Principle; which says that if you want to predict people's behavior; a good place to start is by examining their incentives. Topic: Normative Economics Versus Positive Economics
test-bank-principles-of-economics-6th-edition-frank.docx