Provide two examples of a monetary incentive and two examples of non-monetary incentive, a carrot and a stick of each, that government policies use to influence behavior
What will be an ideal response?
A monetary carrot that the students might answer because it is close to their lives is student aid, such as Pell grants. A monetary stick might be taxes on liquor. A non-monetary carrot is government support for youth sports, such as allowing little league teams to use a county park, and a non-monetary stick is jail terms for illegal drug or alcohol use.
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John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000. If there is a 10 percent chance that he could lose all his wealth, what is his expected wealth?
A) $0 B) $2,000 C) $17,000 D) $18,000
Which one of the following statements is true?
a. Resources flow from the government to firms. b. Taxes flow from foreign economies to the government. c. Goods and services flow from households to foreign economies. d. Resources flow from households to firms. e. Resource payments flow from households to the government.